Hi,
I was doing a bit of research to get better familiarity with the platform, specifically around adding journal entries to account for corporation tax liabilities and payments.
I found this description of the various items making up the chart of accounts, along with a handy infographic, from Glenn
This is great, and matches my mental model of the different accounts and their roles - except for one thing:
In the diagram sales are debited from the Debtor control account, and upon payment by the client a second journal entry is created debiting that same amount to the Bank account, crediting the debtor control. This makes sense to me (including transactions in the bank account having the inverse ‘polarity’ to entries on a bank statement).
But in the diagram above on the left hand side, pending invoices from suppliers are debited from the Creditor control account. When payments are made to suppliers an additional journal entry debits the bank account and credits the creditor control account. You see this reflected both in the colour/labels on the lines from the invoices to the credit accounts, and in the example ledgers on the left.
These two journal entries seem flipped to me, I’d expect pending invoices balances from suppliers to be credited to the Creditor control account - and I’m pretty sure that’s what I see in my chart of accounts on QF when I use the built-in UI for raising purchases from suppliers etc. To me, a sale and an expense can’t both result in the debit/credit control accounts being credited, because the bank account entries I’ll end up matching them against eventually will be in opposite directions.
If it’s that the debtors control account is an asset account and the creditors control account is a liability account, then is it fair to say that the language used in the QF UI isn’t “aware” of that distinction? I’m referring to the ledger details pages: /nominal/ledgerDetail?code=2100 and /nominal/ledgerDetail?code=1100
Sorry for my imprecise language on this, and I appreciate the thread I’m linking to is almost a decade old - but its a helpful diagram and I want to understand what I’m misunderstanding about it.
Thanks!