‘The truth is
very powerful and overcomes lies, if you know how to expose it.’
Bookkeeping
entries have two columns of numbers, one on the left and one on the right.
These tell us
what the bank owns and what money the bank owes to customers.
The left hand
column is the asset column.
The asset column
records what the bank owns.
Cash and
promissory notes are assets and recorded in this left hand column.
How do you know
if something is an asset?
It is easy to
tell. If you can sell it, it is an asset.
Assets have
value.
The right-hand
column, generally speaking, is the liability and capital column.
The liability
means you owe money to someone.
You cannot sell a
liability.
You cannot sell
someone what you owe them.
Some people call
the left column a debit and the right column a credit.
Just remember
that it is a way to determine how much the bank owes you.
The bank
li-ability is merely a scorecard to record how much legal tender the bank owes
each customer.
Think of the
banks as one big bank working in cooperation, acting in unison.
The following
examples will show you the bank's bookkeeping entries for deposits and the
alleged loans:
Example #1: If
you deposit $6,000 cash in the bank, these are the bank bookkeeping entries:
Cash $5,000 Debit
(asset)
Demand Deposit
Account (DDA) $5,000 Credit (liability)
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