Because in general, they assume that Income
is a negative value to assimilate
with withdrawing from an account A to an account B. So, the withdraw from A to B
is considered negative and can be categorized as Income.
So, the credit is everything that increases your balance and debit is everything
that decreases it, Income
is the decrease from an account A that is doing the
transaction, thus decreasing their balance, and going to the B account, for example,
and increasing the credit and consequently your balance.
Based on that explanation, here’s another way to look at your balance report: every negative figure means that that account or person or place has less money now than when you started your ledger; and every positive figure means that that account or person or place has more money now than when you started your ledger. Make sense?
The pattern to categorize the accounts can be called: American approach.
Name | Debit | Credit |
---|---|---|
Asset | Increase | Decrease |
Expenses | Increase | Decrease |
Incomes | Decrease | Increase |
Capital | Decrease | Increase |
Liability | Decrease | Increase |