Debit memos from a bank reduce a depositor's cash balance, and credit memos increase the...
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Accounting
Debit memos from a bank reduce a depositor's cash balance, and credit memos increase the balance. This seems backwards from the normal debit-and-credit rules. What is the explanation?
- From a banks perspective, customers deposits are liabilities.
- Banks are required to guarantee the safety of all customer deposits.
- Bank accounting practices were created in 1943, before the debit-and-credit rules were adopted.
- State banking regulations require banks to use different accounting practices.
Debit memos from a bank reduce a depositor's cash balance, and credit memos increase the balance. This seems backwards from the normal debit-and-credit rules. What is the explanation?
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