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When you store a transaction into a database
1) Do you store Credit and debit in the same record under two different columns? (without the positive or the negative sign)
Example 1A
TABLENAME
...
...
(Credit) null
(Debit) 100
Example 1B
TABLENAME
...
...
(Credit) 250
(Debit) null
Or
2) Do you store 1 value with a positive for credit, and a negative sign for debit?
Example 2A
TABLENAME
...
...
(Amount) -100
Example 2B
TABLENAME
...
...
(Amount) 250
941
All debit accounts are meant to be entered on the left side of a ledger while the credits are on the right side. For a general ledger to be balanced, credits and debits must be equal. Debits increase asset, expense, and dividend accounts, while credits decrease them.
In the double-entry system, transactions are recorded in terms of debits and credits. Since a debit in one account offsets a credit in another, the sum of all debits must equal the sum of all credits.
A debit entry in an account represents a transfer of value to that account, and a credit entry represents a transfer from the account. Each transaction transfers value from credited accounts to debited accounts.
Accountants (and many bookkeepers, if they're any good) know that there is absolutely no difference between credits and debits. They're simply movements of value.
They should be stored in the same column, with a signed value. That makes double-entry accounting so much easier(a). Some people believe that double entry accounting means you keep two sets of books, one for the tax department (to minimise tax paid) and one for reality.
However, it really means that every transaction is balanced, that it has a credit and debit entry although they often consist of lots of parts rather than just two, and they cross freely between the balance sheet (e.g., equity, assets, liabilities) and the profit and loss (e.g., income, expenditure). For example, buying some shares with brokerage may be:
cash at bank Asset 2019.95 cr
shares at cost Asset 2000.00 dr
brokerage Expense 19.95 dr
----------
0.00
(a) You can treat me as an authority here(b). I've worked on multiple commercial-scale accounting packages, one of which was huge. More importantly, my wife is a CA and she agrees with me, and that's unusual enough that I have to be right :-)
(b) Of course, you shouldn't treat anyone as an authority(c). "Everyone, by the age of 30, is either their own doctor or an idiot" and so on. Make sure you understand why something is accepted as "right", don't just blindly follow the crowd.
(c) Unless it's me :-)
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