Bitcoin and Altcoin Wallets 6.1.5 release notes – What is debit? What is credit?
Usage of the words “debit” and “credit” in the plugin was wrong, and will be fixed in the upcoming release 6.1.5 of the plugin.
Recently a user pointed out that I’ve been using the words “debit” and “credit” wrong in the plugin.
Currently a transaction that increases a user’s account balance is reported by the plugin as “debit” and one that decreases the balance is “credit”. Apparently the correct usage of the terms is the other way around.
Upon investigating further, it turns out that I’m not the only one who is confused. Consider the following two contradictory sources:
Thankfully ChatGPT was able to explain to me why this is often confused:
The source of confusion between the terms “debit” and “credit” in accounting may be due to the fact that these terms have different meanings in everyday language compared to their meaning in accounting.
In everyday language, “debit” often refers to a deduction or decrease, while “credit” refers to an addition or increase. However, in accounting, the terms “debit” and “credit” have specific meanings that are used to record financial transactions.
In accounting, a “debit” entry refers to an increase in an asset account, or a decrease in a liability or equity account. A “credit” entry refers to a decrease in an asset account, or an increase in a liability or equity account.
In any case, and after further research, it turns out that the correct usage of the words, in the context of modifying account balances, is the one mentioned on Investopedia: “Credit” is an increase in balance, and “debit” is a decrease in balance.
I will have to roll out changes to that effect. I am also taking the opportunity to push out a few less important improvements with these releases.
Please do not be confused by this change. You may also decide to notify your users.
In any case, you can always look at the sign (+/-) of an amount: A transaction with a negative amount decreases from (i.e. debits) your balance. A positive amount increases (or credits) your balance.
These are the versions where the words “debit” and “credit” will be swapped:
|Bitcoin and Altcoin Wallets|
|Tip the Author Extension|
I feel dumb now and I apologize to all of you for the confusion. Oh well! Live and learn…
thanks for the clarification
And thank you for pointing this out!
is a pleasure