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faq: debits and credits

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Simon Michael
2024-02-03 09:08:55 -10:00
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@@ -143,7 +143,23 @@ See also:
- https://www.reddit.com/r/plaintextaccounting/comments/18zxlbn/hledger_year_closing/ (2024)
- https://github.com/simonmichael/hledger/issues/2151
### Where are debits and credits ? Why are some balances negative ?
Many plain text accounting tools use negative and positive numbers in place of the traditional *credit* and *debit* terminology.
Of course the credits and debits are still there; in this system, whenever you see a negative amount being posted in an account, it is a credit, and when you see a positive amount posted, it is a debit.
This is just a different surface presentation, which most newcomers find more intuitive and easier to learn.
Because of this, PTA tools often show liability, equity, and revenue account balances as negative numbers.
So eg when a liability becomes larger (more debt!), the balance becomes a larger negative number (more negative).
Similarly, when equity or revenues increase, their numbers get more negative.
You'll get used to reading these kind of reports in a day or two.
Some PTA tools also give the option of flipping these negative signs, or showing traditional credit and debit terminology.
More discussion:
- [reddit: Is there any plain text accounting software which uses standard debits and credits?](https://www.reddit.com/r/plaintextaccounting/comments/18sbmsx/is_there_any_plain_text_accounting_software_which/)
- [hledger FAQ: Why are my revenue (income), liability, and equity balances negative ?](https://hledger.org/faq.html#why-are-my-revenue-income-liability-and-equity-balances-negative-)
## General usage