[juliek]

Ican't get my head round why income is shown as a minus amount in the accounts at my work?

[LILY2609]

Ican't get my head round why income is shown as a minus amount in the accounts at my work?

I'll try to add some color to this.
It's based on the double-entry method of bookkeeping - every debit (plus) entry must have an offsetting credit (minus) entry, to keep the books (general ledger) "in balance", i.e. total debits must equal total credits.
General Ledger accounts have "natural" balances. The natural balance for assets is debit, for liabilities it's credit, for income it's a credit and for expenses it's a debit. When all of these account balances are added together, the net result should be zero - that tells you that your general ledger is in balance.

Debits are charges, such as payments or expenses. Credits are entries such as revenues or cash receipts.

Another simplistic way to look at it, is when your bank "credits" your account for a deposit you made, that increases your account balance. When your bank "debits" your account for a check you wrote, or for a bank fee, that reduces your bank account balance.

Hope this helps.

[codyman144]

Ican't get my head round why income is shown as a minus amount in the accounts at my work?

Juliek,

As Lily explained revenues normally have a credit balance which in many accounting software packages is displayed as a negative number. Don't think of it as negative because that is not correct. This really just means that you have a credit balance which is normal and for revenue (income) a credit balance is positive.

Think of it this way if you sell something for cash you receive an asset (cash) and assets have a debt balance. So when you offset the debt on the journal entry you have to credit something (revenue). Like this:

Db Cash 500
Cr Revenue 500

In accounting every entry must have two sides a debt and a credit. This is why we call it double entry accounting. For revenues, Liabilities and Equity credit balances are normal and do not indicate a negative that is just the way is it displayed in some accounting systems. I understand your confusion I use Peoplesoft GL at work and to enter a credit I enter it as a negative number.

Also, I know you are new here but please don't give negative feedback for someone when you simply don't understand their answer yet. Ask for further clarification and give the person a chance to explain it to you before leaving feedback.