[fauigerzigerk]

>You would have to define what you mean by "bank" in order for this to make sense.

Bank means bank ledger account. The bank balance and receivables cannot both increase because they are both assets.

>That's right. The distinction is based on whether the account represents an asset or a liability. ... A completely equivalent formulation is that liabilities have negative signs attached to them

Understood. My point was merely that you cannot just change the labels.

The downside of this approach is that you would no longer be able to see whether a journal entry balances out based on the labels alone.

[lisper]

> The downside of this approach is that you would no longer be able to see whether a journal entry balances out based on the labels alone.

Yeah, well, there is this cool new invention called a "digital computer" that can help a lot with that. You don't have to keep the ledger on paper using quill and ink any more.

[fauigerzigerk]

Absolutely, but digital documents are not accounting software either. Communication would definitely get harder if we lose debit/credit and with it the left/right visualisation of T accounts.

Perhaps some simple convention would help, like attaching +/- to account names. We do have account numbers and accountants know their meaning but most people don't.

[lisper]

> like attaching +/- to account names

Or "asset" and "liability". (Big displays are a thing now too.)

[fauigerzigerk]

It would be very confusing to label expense accounts as "liability".

Liability has a very specific meaning (debt) and expenses do not necessarily increase liability.

And then there are accounts that can be assets or liabilities depending on their balance.

(Besides, very small displays a thing now too)

[lisper]

> It would be very confusing to label expense accounts as "liability".

Why?

> expenses do not necessarily increase liability.

That depends on what you mean by "expenses". If you give someone an expense account, that is a commitment to make payments for expenses, i.e. debt, so it's a liability. When you actually pay for those expenses (or reimburse someone for incurring those expenses) you are paying off debt and reducing your liabilities. Why is that confusing?

> And then there are accounts that can be assets or liabilities depending on their balance.

Sure. So? An asset account is one which represents assets when its balance is positive, and a liability account is one which represents liabilities when its balance is positive. A negative balance in an asset account is a liability, and a negative balance in a liability account (like a credit card, for example) is an asset.

You could do away with this convention and just represent all assets as positive values and all liabilities as negative, but people are used to distinguishing "money that you have" from "money that you owe" and having both of those represented by positive numbers in the usual case.

> very small displays a thing now too

Not for accountants.

[fauigerzigerk]

>That depends on what you mean by "expenses". If you give someone an expense account, that is a commitment to make payments for expenses, i.e. debt, so it's a liability.

This is not what expense account means in accounting. An expense account is an account that records expenses incurred such as your AWS bill, rent payments or salaries paid.

These are not liabilities and labelling them as such is more than confusing.

>Sure. So? An asset account is one which represents assets when its balance is positive, and a liability account is one which represents liabilities when its balance is positive.

Exactly, so how do you label it if it can be either? The only way I see is to label it according to its main purpose and accept that it's sometimes semantically wrong. That's effectively what the chart of accounts does.