DOUBLE ENTRY IN A TRIPLE EQUATION

Thomas: There is something confusing about this bloody equation:

The problem is that the way you increase your assets and income is the opposite of how you increase expenses and debt. What I mean is that if you increase your assets, you are adding to the asset category – but if you increase your debt or expenses it means that you subtracting from debt or expenses (“+” increases your wealth and “-” decreases it) – and vice versa. Here are some examples:

I have to tell you, in accounting terms, there is no way to decrease your income or expenses. You either generate income, generate less income or generate no income. Remember, your income and expenses are your “video camera” – you either have some kind of income in your movie, or you have no income.

It is not the same with your “photos” = your assets and debt. As things change over time, you must increase or decrease assets and/or debt to have an adequate picture.

Now try to enter some of your everyday transactions using the “triple equation.”

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