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double entry accounting
Gary Becker 
     
3 years ago
ChatGPT was correct the first time. Buy $1000 of computer parts DEBITS inventory and reduces (credits) bank accounts. Debits INCREASE asset accounts (& expense accounts) and Credits DECREASE asset accounts (and expense accounts. Credits increase revenue & liability accounts. Borrow money--Increases (credits) then loan account balance--and Increases (debits) the bank account balance. Debits equal credits Balance sheet stays in balance. :)
Daniel de Koning  @Reply  
      
3 years ago
I also agree with the comments of Gary. This is how the transactions are being recorded in a business environment (standard accounting principles).
The confusion is probably due to the way people look at their banks statements. When you receive money in your bank account, it shows up as a 'credit' entry.  When documenting this receipt in a business administration this will be recorded as a 'debit' entry. Your asset (money on a bank account) is increased.
The bank statement itself is from the perspective of the bank. When you have '1000 on your bank account (shown as a Credit), this is actually a liability for the bank (they owe you money), which is why it shows up as a credit on the bank statement.
Nowadays (digital, apps) the terms debit and credit no longer used, but replaced with a (resp.) negative or a plus sign (1 column entry). Same issue as described earlier, it's still a statement from the bank and not how a business administration would record it in their books.
Richard Rost  @Reply  
          
3 years ago
Yep. Thanks guys. LOTS of people caught my goof. I updated the video.

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