Debits & Credits # 2: When Deadbeats are Misclassified as Great Catches

In the last post I talked about the account manipulation that could create a fake balanced picture. Now I’m going deeper into the mechanics of the Debits and Credits behind it. In Accounting:

Assets (Debit) = Liabilities (Credit) + Equity (Credit)

Revenues (Credit) - Expenses (Debit) = Net Income (Credit)

Net Income, at the end of the year, is added onto Equity. That’s how everything ties together (there’s something very ying-yang about that). Everything has to balance, no matter where you put the numbers in. Notice Assets and Expenses are both debit accounts? That means a number could be classified as either, and things would still balance, even if it doesn’t reflect reality.

Now let’s apply this to some of my previous posts. Remember in Cash-Based Accounting: Show Me the Money-NOW!, the girl who keeps putting in the effort and waits for a payoff from an unworthy guy? She thinks she’s doing this entry (Dr=Debit, Cr=Credit):

Dr (Increase) Asset – Future Reward for Being Long suffering

     Cr (Decrease) Asset – Her Bank Account / Youth / Energy

when she’s really doing this entry:

Dr (Increase) Expense – Waste of Effort for Being a Sucker

     Cr (Decrease) Asset – Her Bank Account / Youth / Energy

And in Write Off: Get Those Losers Off Your Books!, a girl is keeping a fake value on her books, when she should admit that this happened a long time ago:

Dr (Increase) Expense – Write Off of a Deadbeat

    Cr (Decrease) Asset – Future Husband Material

That’s why I encourage women to be truthful to themselves about where they stand. You can’t fix what you wouldn’t even admit out loud.