Credit Cards and Loans
What's the difference between a credit card and a loan account?
Here are some guidelines for choosing which type of account to use in Goldenseal accounting software:
Usually a credit card is a "revolving" account where you can charge any amount and pay any amount. It usually keeps a zero or negative balance, since you sometimes owe money to the credit card issuer, but they won't owe money to you.
Some types of cards should not be entered as a Credit Card account:
A loan can be a line of credit with a "revolving" balance, or it can have a fixed payment schedule.
You can write checks from a Loan account, so it really acts the same as a Checking account. If you can write checks from an account and usually keep a negative balance, enter it as a Loan account. If you usually keep a positive balance, enter it as a Checking account. However, the only real difference is where the balance shows up on your Balance Sheet report.
HINT-- If the account balance is positive and negative for exactly equal times, you'll need to flip a coin to decide which type of account to use (heads = checking, tails = loan). If the coin lands on its edge and stays there, you'll need to mail the coin to our tech support staff for a ruling ;-)
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