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Comment by thomastjeffery

2 years ago

The purpose of the words "credit" and "debit" is the same purpose of the structure of double-entry bookkeeping: to make every statement unambiguous, no matter what order or context you put the words in. By replacing familiar verbs like "paid" and "earned" with the nouns "debit" and "credit", we can write sentences where the order of words doesn't change the meaning, and where we never need to figure out what tense (past, present, future) to apply.

To simply write that, "Bob's account has a credit of $12 and a debit of $7" is timeless. That sentence can go anywhere, and always be explicitly correct. It is context-free grammar: the same category that all programming languages belong to. Because a programming language is context-free, it can be perfectly understood (and translated) by a parser and compiler. Because statements using the nouns "credit" and "debit" are context-free, they can be perfectly understood as the data they represent.

> The "credit" and "debit" terminology is ridiculous because their definitions swap around depending on which account you're talking about, which is an utterly absurd (mis)use of language and the main reason people find this confusing.

On the contrary! Their definitions are always the same. They apply specifically to the account you are talking about, because they are that account: an account is a list of credits and debits.

The reason that people get confused is that we are used to using verbs like "paid" and "earned". When we use verbs, the data is the transaction, not the account. When we use the nouns "credit" and "debit", the data is the account, and not the transaction. Most people are introduced to these words with "credit card" and "debit card". That was the mistake, because cards are used for transactions, which is precisely the wrong context to use these words. It would have been much more clear to talk about "crediting cards" and "debiting cards".

4 comments

thomastjeffery

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mrkeen  2 years ago

> Bob's account has a credit of $12 and a debit of $7

(I'm 80% sure that the above reads that Bob actually owns $5 he can spend. But I'm equally sure that I get Debits and Credits backward, so I probably read it wrong.)

In any case, you've only described a single account at rest. You need to go one step further and describe an entire transaction in those terms, so that someone can swoop in and say "you got it backwards".

  • thomastjeffery  2 years ago

    You read it correctly. The account's "balance" would be a "credit of $5".

    A transaction involves multiple accounts, so it would be written as multiple sentences: "Alice's account has a credit of $7. Bob's account has a debit of $7." If you want to write about the transaction itself, you could do that with a verb: "Transaction #23254 applies a debit of $7 to Bob's account, and a credit of $7 to Alice's account." A double-entry book is just a table with a column for each account, and a column for the date/time each credit or debit was transacted.

    The whole point here is that when someone swoops in, every sentence spoken is guaranteed to be unambiguous; no matter what context that someone brings with them. So long as "credit" and "debit" are used exclusively as nouns, there can be no confusion.