Today's post is by Tech Support Specialist and our resident accounting guru, Andrea Whitney.
People can get perplexed when it comes down to anything having to do with General Ledger. It is worse than a foreign language. (At least with a foreign language, you can visit an exotic land for more in-depth research, but I digress.) In any case, the best thing someone can do to understand the items in the General Ledger is to describe these different accounts in a person’s everyday life.
Accounting as a whole is based on a balanced double entry. The left column is debit and right is credit, and the two must always equal each other. If you’re into science, think of it as a law of thermodynamics: matter and energy (or money, in this case) is never created or destroyed; it just changes which side of the balance sheet it’s on. Or if you’re into working out, it’s like doing a rep of anything. You don’t just hold a weight up infinitely; you lift it, then lower it back down (and put the weight plates back where you got them or you’ll get glared at by the other gym folks).
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