Ubuntu
kmymoney2 package

Split Transactions - Debits and Credits

Asked by nicedanmonkey

I am trying to use the split transaction feature and I am very confused with how it works. In particular I'm trying to figure out how to designate a debit from a credit. For example, I am trying to credit (decrease) and asset, debit (increase) another asset, credit (increase) a liability, and debit (increase) an expense. I migrated from gnucash and this was a simple procedure. In Kmymoney this is a challenging task.

So my question is: What designates a debit and what designates a debit in the split transaction window?

So far the answer to my question seems to be that it's random. I was looking at some my past split transactions that that I imported from gnucash and some expenses that are debited have () around them and others don't. I don't understand how to used this split system properly.

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Hei Ku
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Hei Ku (asoliverez) said : 		#1

When you are entering a transaction in an asset, a positive split of another asset means that asset will increase, a negative split of a liability means the liability will decrease, and a negative balance for a expense, means that the expense will increase.

http://kmymoney2.sourceforge.net/online-manual/details.ledgers.split.html

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nicedanmonkey (nicedanmonkey) said : 		#2

Thanks for your fast reply. What you said doesn't make sense to me. In accounting, assets and expenses are increased and decreased the same way, debits increase them and credits decrease them. In your example they are acting like opposites, the positive split for an asset increases it and a negative split for an expense increases it. Why is there a difference between double entry accounting rules and the way kmymoney handles splits?

Also, would what you said be different if entering the transaction in a liability account?

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Best Hei Ku (asoliverez) said : 		#3

Sorry, I made a mistake about asset accounts.

KMyMoney uses double-entry accounting, but it is hidden from the user, and it is shown according to what account you are editing at that time.
For example, the split to enter my salary looks like this if I see it from my savings account, where I receive the monthly deposit.

salary +2000
taxes -100
bonus +1000
medicare -100
employee share purchase +100

salary and bonus are income accounts.
taxes and medicare are expense accounts
employee share purchase is an asset account.

Does it make more sense now?

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nicedanmonkey (nicedanmonkey) said : 		#4

Yes, that makes sense. Though I would prefer to be able to see both the debit and credit side more clearly, you have answered my question. Thanks!

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nicedanmonkey (nicedanmonkey) said : 		#5

Thanks Hei Ku, that solved my question.