[GNC] liability or expense

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[GNC] liability or expense

Baldero Mendoza
Please be patient with me - brand new to this.

Household financial stuff. I want to post a "google play" purchase.
Should I post as an expense or a liability?

I have accounts open for things like "electricity" and that seems to
work just fine, but "google play" looks like it works sort of like a
credit card, so I listed it under  "liabilities", and that seems to
work too. I made the connected account "checking" and it all seems to
balance and work.

However, what bothers me is that the "google play" entry under
"liabilities" is listed as a red negative number. So I have two red
negative numbers listed now, one under "liabilities" and one under
"google play". Everything balances, so is it okay or should I place
"google play" purchases as "expenses"? (I just started gnucash so
there aren't any credit card or debit card purchases yet.) The
"expenses" stuff gets listed as black positive numbers even though
they're an outflow of money just like the "google play" stuff under
"liabilities". Maybe it's optional and can be done either way?
Confusing.

Thank you everybody!
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[GNC] Fwd: liability or expense

Emisbod
Forwarded as I forgot to 'reply  all'. Sorry. Newbie brain!

Cheerio

Graham

---------- Forwarded message ---------
From: Graham Balin <[hidden email]>
Date: Mon, 6 Aug 2018, 10:12 pm
Subject: Re: [GNC] liability or expense
To: Baldero Mendoza <[hidden email]>


I have found Gnucash to be a very powerful hammer to crack a very small nut
using it for domestic accounts only. Does the job well but there are
features of double entry bookkeeping that are superfluous. For example you
will have an expenses;groceries account that will be a mass of entries and
will never be reconciled because it is irrelevant.just ignore it. It is
there to help you categorise your spending. Well, you can reconcile it if
you want to spend half your life on your accounts!
I'm into my 3rd month and haven't done any reports yet. Just pleased that
all bank accounts and liabilities (credit cards)are balanced and
reconciled. Investments are taking a bit longer to get my head around.
Good luck!

Cheerio

Graham

On Mon, 6 Aug 2018, 10:02 pm Baldero Mendoza, <[hidden email]> wrote:

> Please be patient with me - brand new to this.
>
> Household financial stuff. I want to post a "google play" purchase.
> Should I post as an expense or a liability?
>
> I have accounts open for things like "electricity" and that seems to
> work just fine, but "google play" looks like it works sort of like a
> credit card, so I listed it under  "liabilities", and that seems to
> work too. I made the connected account "checking" and it all seems to
> balance and work.
>
> However, what bothers me is that the "google play" entry under
> "liabilities" is listed as a red negative number. So I have two red
> negative numbers listed now, one under "liabilities" and one under
> "google play". Everything balances, so is it okay or should I place
> "google play" purchases as "expenses"? (I just started gnucash so
> there aren't any credit card or debit card purchases yet.) The
> "expenses" stuff gets listed as black positive numbers even though
> they're an outflow of money just like the "google play" stuff under
> "liabilities". Maybe it's optional and can be done either way?
> Confusing.
>
> Thank you everybody!
> _______________________________________________
> gnucash-user mailing list
> [hidden email]
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see
> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>
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Re: [GNC] liability or expense

Adrien Monteleone-2
In reply to this post by Baldero Mendoza
I’m not familiar with Google Play accounts specifically.

If they work like a credit limit and you pay later, then they are deferred expenses - thus Accounts Payable.

If you pre-pay say with a gift card, or you top off the available to spend, then it’s a pre-paid expense - an asset account.

====
So, if the deferred expenses route is correct, you can create a liability account called Accrued Expenses.

Then under that, create accounts for specific entities if you like (such as Google Play) or just keep them all lumped together - your choice.

When you make a purchase on the account, record the amount like so:

Dr. Expenses (whatever account you’d normally use here, say ‘Entertainment’)
Cr. Accrued Expenses

When the bill/statement arrives and you pay it, you’d enter:

Dr. Accrued Expenses
Cr. Cash/Checking (or even a Credit Card if that’s the case)

If you want to use the business features because you don’t pay the bill right away and want a due reminder, you can enter a bill from Google Play (set up as a Vendor) and instead of an expense account, book it to the Accrued Expenses account. (or sub-account)

If it works more like a credit card with a limit and possible interest fees, then you might instead create it as a Credit Card type liability account and use it in similar fashion.

====
Of the pre-paid expense asset account is the right way, create a Current Asset account called Pre-Paid expenses.

How detailed you get here is again up to you. I have several sub-accounts here for various gift-cards that lets me see at a glance their remaining balance. If I ever receive a card from the same business, I’ll just add it in. But you can lump them all together if you like.

When buying/receiving a card, or topping up the account reserve:

Dr. Pre-paid Expenses:Google Play
Cr. Cash/Checking/Credit Card/Income:Gifts Received, etc.

When making a purchase, reduce the remaining pre-paid expense with:

Dr. Expenses (again, ‘Entertainment’ or whatever you find appropriate)
Cr. Pre-paid Expenses:Google Play

====

Now, as for the red numbers/signs:

With the Chart of Accounts visible, open the GnuCash > Preferences. (might be Edit or Tools > Preferences/Options in your OS)

Go to the Accounts tab and play with the settings for Reverse Balanced Accounts. (move the preferences over so you can see the Chart of Accounts)

The CoA should update to reflect your preference instantly.

Normally, credit accounts - Liability, Income, Equity are ’negative signed’. If you want to see them all as positive signs (that is a higher number means you owe more, received more and are worth more) then choose ‘Credit Accounts’ for this preference. (this is how I have mine set)

You might still see some accounts as negatives, but that means they are ‘contra-balanced’ that is, not the normal debit/credit balance for that account type. This may be normal based on the account (if it’s a true contra account) but might indicate an improperly entered transaction, or even something like an overdraft condition. (for a checking account for example)

Hope that helps,

Regards,
Adrien


> On Aug 6, 2018, at 3:59 PM, Baldero Mendoza <[hidden email]> wrote:
>
> Please be patient with me - brand new to this.
>
> Household financial stuff. I want to post a "google play" purchase.
> Should I post as an expense or a liability?
>
> I have accounts open for things like "electricity" and that seems to
> work just fine, but "google play" looks like it works sort of like a
> credit card, so I listed it under  "liabilities", and that seems to
> work too. I made the connected account "checking" and it all seems to
> balance and work.
>
> However, what bothers me is that the "google play" entry under
> "liabilities" is listed as a red negative number. So I have two red
> negative numbers listed now, one under "liabilities" and one under
> "google play". Everything balances, so is it okay or should I place
> "google play" purchases as "expenses"? (I just started gnucash so
> there aren't any credit card or debit card purchases yet.) The
> "expenses" stuff gets listed as black positive numbers even though
> they're an outflow of money just like the "google play" stuff under
> "liabilities". Maybe it's optional and can be done either way?
> Confusing.
>
> Thank you everybody!
> _______________________________________________
> gnucash-user mailing list
> [hidden email]
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>


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Re: [GNC] liability or expense

Adrien Monteleone-2
I forgot to mention if you go the Business feature route, you don’t need the Accrued Expenses account unless you want to track your limit available. If you just get a bill and pay it, you can just post directly to Accounts Payable.

If it’s a pre-paid asset though, you need that specific account to ‘hold’ the funds until you actually spend them. They aren’t expenses until that happens.

Regards,
Adrien

> On Aug 6, 2018, at 4:16 PM, Adrien Monteleone <[hidden email]> wrote:
>
> I’m not familiar with Google Play accounts specifically.
>
> If they work like a credit limit and you pay later, then they are deferred expenses - thus Accounts Payable.
>
> If you pre-pay say with a gift card, or you top off the available to spend, then it’s a pre-paid expense - an asset account.
>
> ====
> So, if the deferred expenses route is correct, you can create a liability account called Accrued Expenses.
>
> Then under that, create accounts for specific entities if you like (such as Google Play) or just keep them all lumped together - your choice.
>
> When you make a purchase on the account, record the amount like so:
>
> Dr. Expenses (whatever account you’d normally use here, say ‘Entertainment’)
> Cr. Accrued Expenses
>
> When the bill/statement arrives and you pay it, you’d enter:
>
> Dr. Accrued Expenses
> Cr. Cash/Checking (or even a Credit Card if that’s the case)
>
> If you want to use the business features because you don’t pay the bill right away and want a due reminder, you can enter a bill from Google Play (set up as a Vendor) and instead of an expense account, book it to the Accrued Expenses account. (or sub-account)
>
> If it works more like a credit card with a limit and possible interest fees, then you might instead create it as a Credit Card type liability account and use it in similar fashion.
>
> ====
> Of the pre-paid expense asset account is the right way, create a Current Asset account called Pre-Paid expenses.
>
> How detailed you get here is again up to you. I have several sub-accounts here for various gift-cards that lets me see at a glance their remaining balance. If I ever receive a card from the same business, I’ll just add it in. But you can lump them all together if you like.
>
> When buying/receiving a card, or topping up the account reserve:
>
> Dr. Pre-paid Expenses:Google Play
> Cr. Cash/Checking/Credit Card/Income:Gifts Received, etc.
>
> When making a purchase, reduce the remaining pre-paid expense with:
>
> Dr. Expenses (again, ‘Entertainment’ or whatever you find appropriate)
> Cr. Pre-paid Expenses:Google Play
>
> ====
>
> Now, as for the red numbers/signs:
>
> With the Chart of Accounts visible, open the GnuCash > Preferences. (might be Edit or Tools > Preferences/Options in your OS)
>
> Go to the Accounts tab and play with the settings for Reverse Balanced Accounts. (move the preferences over so you can see the Chart of Accounts)
>
> The CoA should update to reflect your preference instantly.
>
> Normally, credit accounts - Liability, Income, Equity are ’negative signed’. If you want to see them all as positive signs (that is a higher number means you owe more, received more and are worth more) then choose ‘Credit Accounts’ for this preference. (this is how I have mine set)
>
> You might still see some accounts as negatives, but that means they are ‘contra-balanced’ that is, not the normal debit/credit balance for that account type. This may be normal based on the account (if it’s a true contra account) but might indicate an improperly entered transaction, or even something like an overdraft condition. (for a checking account for example)
>
> Hope that helps,
>
> Regards,
> Adrien
>
>
>> On Aug 6, 2018, at 3:59 PM, Baldero Mendoza <[hidden email]> wrote:
>>
>> Please be patient with me - brand new to this.
>>
>> Household financial stuff. I want to post a "google play" purchase.
>> Should I post as an expense or a liability?
>>
>> I have accounts open for things like "electricity" and that seems to
>> work just fine, but "google play" looks like it works sort of like a
>> credit card, so I listed it under  "liabilities", and that seems to
>> work too. I made the connected account "checking" and it all seems to
>> balance and work.
>>
>> However, what bothers me is that the "google play" entry under
>> "liabilities" is listed as a red negative number. So I have two red
>> negative numbers listed now, one under "liabilities" and one under
>> "google play". Everything balances, so is it okay or should I place
>> "google play" purchases as "expenses"? (I just started gnucash so
>> there aren't any credit card or debit card purchases yet.) The
>> "expenses" stuff gets listed as black positive numbers even though
>> they're an outflow of money just like the "google play" stuff under
>> "liabilities". Maybe it's optional and can be done either way?
>> Confusing.
>>
>> Thank you everybody!
>> _______________________________________________
>> gnucash-user mailing list
>> [hidden email]
>> To update your subscription preferences or to unsubscribe:
>> https://lists.gnucash.org/mailman/listinfo/gnucash-user
>> If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
>> -----
>> Please remember to CC this list on all your replies.
>> You can do this by using Reply-To-List or Reply-All.
>>
>


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Re: [GNC] liability or expense

Stephen M. Butler
In reply to this post by Baldero Mendoza
On 08/06/2018 01:59 PM, Baldero Mendoza wrote:

> Please be patient with me - brand new to this.
>
> Household financial stuff. I want to post a "google play" purchase.
> Should I post as an expense or a liability?
>
> I have accounts open for things like "electricity" and that seems to
> work just fine, but "google play" looks like it works sort of like a
> credit card, so I listed it under  "liabilities", and that seems to
> work too. I made the connected account "checking" and it all seems to
> balance and work.
>
> However, what bothers me is that the "google play" entry under
> "liabilities" is listed as a red negative number. So I have two red
> negative numbers listed now, one under "liabilities" and one under
> "google play". Everything balances, so is it okay or should I place
> "google play" purchases as "expenses"? (I just started gnucash so
> there aren't any credit card or debit card purchases yet.) The
> "expenses" stuff gets listed as black positive numbers even though
> they're an outflow of money just like the "google play" stuff under
> "liabilities". Maybe it's optional and can be done either way?
> Confusing.
>
> Thank you everybody!
> _______________________________________________

All  of us were brand new at one point.  I'm not much past that stage
either.

I'm not a CPA nor a book-keeper (though am married to an accountant and
have written accounting software), so this is just my opinion.

1.  I would make an expense category for "Software" rather than tying it
to "Google Play" -- but that's just my approach.  Would make it an
expense though.

2.  The Google Play items (at least some of mine) get charged off to
your credit card.  That would be a Liability account (short-term).

3.  So, the two sides for the transaction (purchase) would be the
expense (Software or Google Play) and CreditCardClearingAccount (Liability).

4.  When you pay off the credit card, the transaction would be the
CreditCardClearingAccount (to reduce toward zero) and the Checking
Account (Asset) from which the payment was made.

Hope this helps clarify your thinking.

--Steve

--
Stephen M Butler, PMP, PSM
[hidden email]
[hidden email]
253-350-0166
-------------------------------------------
GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8

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Re: [GNC] Fwd: liability or expense

Stephen M. Butler
In reply to this post by Emisbod
On 08/06/2018 02:14 PM, Graham Balin wrote:

> Forwarded as I forgot to 'reply  all'. Sorry. Newbie brain!
>
> Cheerio
>
> Graham
>
> ---------- Forwarded message ---------
> From: Graham Balin <[hidden email]>
> Date: Mon, 6 Aug 2018, 10:12 pm
> Subject: Re: [GNC] liability or expense
> To: Baldero Mendoza <[hidden email]>
>
>
> I have found Gnucash to be a very powerful hammer to crack a very small nut
> using it for domestic accounts only. Does the job well but there are
> features of double entry bookkeeping that are superfluous. For example you
> will have an expenses;groceries account that will be a mass of entries and
> will never be reconciled because it is irrelevant.just ignore it. It is
> there to help you categorise your spending. Well, you can reconcile it if
> you want to spend half your life on your accounts!
> I'm into my 3rd month and haven't done any reports yet. Just pleased that
> all bank accounts and liabilities (credit cards)are balanced and
> reconciled. Investments are taking a bit longer to get my head around.
> Good luck!
>
> Cheerio
>
> Graham

You typically don't reconcile expense accounts.  You can go through a
year-end process that will "zero" the expense/income accounts and update
equity (or whatever you want) via a year-end offsetting transaction. 
It's nice if you want the equity account updated annually.

> On Mon, 6 Aug 2018, 10:02 pm Baldero Mendoza, <[hidden email]> wrote:
>
>> Please be patient with me - brand new to this.
>>
>> Household financial stuff. I want to post a "google play" purchase.
>> Should I post as an expense or a liability?
>>
>> I have accounts open for things like "electricity" and that seems to
>> work just fine, but "google play" looks like it works sort of like a
>> credit card, so I listed it under  "liabilities", and that seems to
>> work too. I made the connected account "checking" and it all seems to
>> balance and work.
>>
>> However, what bothers me is that the "google play" entry under
>> "liabilities" is listed as a red negative number. So I have two red
>> negative numbers listed now, one under "liabilities" and one under
>> "google play". Everything balances, so is it okay or should I place
>> "google play" purchases as "expenses"? (I just started gnucash so
>> there aren't any credit card or debit card purchases yet.) The
>> "expenses" stuff gets listed as black positive numbers even though
>> they're an outflow of money just like the "google play" stuff under
>> "liabilities". Maybe it's optional and can be done either way?
>> Confusing.
>>
>> Thank you everybody!

--
Stephen M Butler, PMP, PSM
[hidden email]
[hidden email]
253-350-0166
-------------------------------------------
GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8

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Re: [GNC] liability or expense

Adrien Monteleone-2
In reply to this post by Stephen M. Butler
Certainly, if you have a card tied to the account and you are charged for each purchase on the spot, then no need for the mess I described.

When you purchase:

Dr. Expenses:Entertainment (software, whatever)
Cr. Credit Card (the one that will be charged)

Use ‘Google Play’ as the Description for the transaction and the actual title purchased as either the Note or the Memo on the expense split.

When entering expenses, I generally use the Description field for the ‘Vendor’ being paid. (who I purchased from)

Otherwise, when you pay the credit card bill, that’s like any other situation, as Google Play is no longer part of the equation as Stephen noted.

Regards,
Adrien

> On Aug 6, 2018, at 4:20 PM, Stephen M. Butler <[hidden email]> wrote:
>
> On 08/06/2018 01:59 PM, Baldero Mendoza wrote:
>> Please be patient with me - brand new to this.
>>
>> Household financial stuff. I want to post a "google play" purchase.
>> Should I post as an expense or a liability?
>>
>> I have accounts open for things like "electricity" and that seems to
>> work just fine, but "google play" looks like it works sort of like a
>> credit card, so I listed it under  "liabilities", and that seems to
>> work too. I made the connected account "checking" and it all seems to
>> balance and work.
>>
>> However, what bothers me is that the "google play" entry under
>> "liabilities" is listed as a red negative number. So I have two red
>> negative numbers listed now, one under "liabilities" and one under
>> "google play". Everything balances, so is it okay or should I place
>> "google play" purchases as "expenses"? (I just started gnucash so
>> there aren't any credit card or debit card purchases yet.) The
>> "expenses" stuff gets listed as black positive numbers even though
>> they're an outflow of money just like the "google play" stuff under
>> "liabilities". Maybe it's optional and can be done either way?
>> Confusing.
>>
>> Thank you everybody!
>> _______________________________________________
>
> All  of us were brand new at one point.  I'm not much past that stage
> either.
>
> I'm not a CPA nor a book-keeper (though am married to an accountant and
> have written accounting software), so this is just my opinion.
>
> 1.  I would make an expense category for "Software" rather than tying it
> to "Google Play" -- but that's just my approach.  Would make it an
> expense though.
>
> 2.  The Google Play items (at least some of mine) get charged off to
> your credit card.  That would be a Liability account (short-term).
>
> 3.  So, the two sides for the transaction (purchase) would be the
> expense (Software or Google Play) and CreditCardClearingAccount (Liability).
>
> 4.  When you pay off the credit card, the transaction would be the
> CreditCardClearingAccount (to reduce toward zero) and the Checking
> Account (Asset) from which the payment was made.
>
> Hope this helps clarify your thinking.
>
> --Steve
>
> --
> Stephen M Butler, PMP, PSM
> [hidden email]
> [hidden email]
> 253-350-0166
> -------------------------------------------
> GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8
>
> _______________________________________________
> gnucash-user mailing list
> [hidden email]
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.


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Re: [GNC] liability or expense

David Carlson-4
In reply to this post by Baldero Mendoza
I don't know how Google Play works.  If it is like a credit card then you
are spending money on some expenses, possibly movies during a month then
paying Google later, then you are missing the expenses which you have now
paid for.  Look at your bill from Google to see those expenses and add them
to Google Play, and now Google Play should have a balance of zero.  Next
month enter the expenses when you get the bill then your balance will be
black and will be the amount that you owe Google.

On the other hand, if you are depositing funds which will be used later,
say, like a Starbucks card, then you should make Google Play an asset
account and the balance will be black until you have spent all the funds
and entered the expenses to that account.  Then you need to re-charge your
account.

You do not need to get fancy at first.  Keep it simple until you are
comfortable, then you can decide later whether you want to track more
details.

David C

On Mon, Aug 6, 2018 at 3:59 PM, Baldero Mendoza <[hidden email]> wrote:

> Please be patient with me - brand new to this.
>
> Household financial stuff. I want to post a "google play" purchase.
> Should I post as an expense or a liability?
>
> I have accounts open for things like "electricity" and that seems to
> work just fine, but "google play" looks like it works sort of like a
> credit card, so I listed it under  "liabilities", and that seems to
> work too. I made the connected account "checking" and it all seems to
> balance and work.
>
> However, what bothers me is that the "google play" entry under
> "liabilities" is listed as a red negative number. So I have two red
> negative numbers listed now, one under "liabilities" and one under
> "google play". Everything balances, so is it okay or should I place
> "google play" purchases as "expenses"? (I just started gnucash so
> there aren't any credit card or debit card purchases yet.) The
> "expenses" stuff gets listed as black positive numbers even though
> they're an outflow of money just like the "google play" stuff under
> "liabilities". Maybe it's optional and can be done either way?
> Confusing.
>
> Thank you everybody!
> _______________________________________________
> gnucash-user mailing list
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Re: [GNC] liability or expense

Stephen M. Butler
In reply to this post by Adrien Monteleone-2
On 08/06/2018 02:27 PM, Adrien Monteleone wrote:

> Certainly, if you have a card tied to the account and you are charged for each purchase on the spot, then no need for the mess I described.
>
> When you purchase:
>
> Dr. Expenses:Entertainment (software, whatever)
> Cr. Credit Card (the one that will be charged)
>
> Use ‘Google Play’ as the Description for the transaction and the actual title purchased as either the Note or the Memo on the expense split.
>
> When entering expenses, I generally use the Description field for the ‘Vendor’ being paid. (who I purchased from)
>
> Otherwise, when you pay the credit card bill, that’s like any other situation, as Google Play is no longer part of the equation as Stephen noted.
>
> Regards,
> Adrien

That's the "fun" side of accounting.  So many ways to do the same
thing.  Only your CPA knows for sure how you should do it -- and that's
because it will be how s/he wants it done.

>
>> On Aug 6, 2018, at 4:20 PM, Stephen M. Butler <[hidden email]> wrote:
>>
>> On 08/06/2018 01:59 PM, Baldero Mendoza wrote:
>>> Please be patient with me - brand new to this.
>>>
>>> Household financial stuff. I want to post a "google play" purchase.
>>> Should I post as an expense or a liability?
>>>
>>> I have accounts open for things like "electricity" and that seems to
>>> work just fine, but "google play" looks like it works sort of like a
>>> credit card, so I listed it under  "liabilities", and that seems to
>>> work too. I made the connected account "checking" and it all seems to
>>> balance and work.
>>>
>>> However, what bothers me is that the "google play" entry under
>>> "liabilities" is listed as a red negative number. So I have two red
>>> negative numbers listed now, one under "liabilities" and one under
>>> "google play". Everything balances, so is it okay or should I place
>>> "google play" purchases as "expenses"? (I just started gnucash so
>>> there aren't any credit card or debit card purchases yet.) The
>>> "expenses" stuff gets listed as black positive numbers even though
>>> they're an outflow of money just like the "google play" stuff under
>>> "liabilities". Maybe it's optional and can be done either way?
>>> Confusing.
>>>
>>> Thank you everybody!
>>> _______________________________________________
>> All  of us were brand new at one point.  I'm not much past that stage
>> either.
>>
>> I'm not a CPA nor a book-keeper (though am married to an accountant and
>> have written accounting software), so this is just my opinion.
>>
>> 1.  I would make an expense category for "Software" rather than tying it
>> to "Google Play" -- but that's just my approach.  Would make it an
>> expense though.
>>
>> 2.  The Google Play items (at least some of mine) get charged off to
>> your credit card.  That would be a Liability account (short-term).
>>
>> 3.  So, the two sides for the transaction (purchase) would be the
>> expense (Software or Google Play) and CreditCardClearingAccount (Liability).
>>
>> 4.  When you pay off the credit card, the transaction would be the
>> CreditCardClearingAccount (to reduce toward zero) and the Checking
>> Account (Asset) from which the payment was made.
>>
>> Hope this helps clarify your thinking.
>> --
>> Stephen M Butler, PMP, PSM
>> [hidden email]
>> [hidden email]
>> 253-350-0166
>> -------------------------------------------
>> GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8
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Re: [GNC] liability or expense

Kevin Reid
In reply to this post by Baldero Mendoza
On Mon, Aug 6, 2018 at 2:00 PM Baldero Mendoza <[hidden email]> wrote:

> Please be patient with me - brand new to this.
>
> Household financial stuff. I want to post a "google play" purchase.
> Should I post as an expense or a liability?
>

I'm familiar enough with Google Play so I figured I'd describe how I handle
it. Google Play shows up two different ways in my accounting.

First, it is a store at which you can buy things. Therefore, if you buy a
thing you should have an expense account for it — and you can have as many
different ones as you feel like grouping your expenses in. Some of mine are
like:
    Expenses:Entertainment:Movies & Music
    Expenses:Computer Software
If you like you could have a 'Expenses:Google Play' account instead, but I
like to group by what things are and not who I bought them from, for the
most part.

You can pay for things with either a credit card directly or with your
"Google Play balance". So, Google Play is a place where you can pre-pay and
have a *positive* (to you) balance. This means it is an *asset* (not a
liability). For myself, because I have several things that act like this, I
have a category for assets that are a dollar amount that can only be spent
on some things (pre-paid balances, store credit), called "Restricted", so I
have the account
    Assets:Restricted:Google Play

So let's say someone gives me a Google Play gift card. I enter that as a
transaction going from Income:Gifts to Assets:Restricted:Google Play.

Then I decide to buy an app for my phone on Google Play. That's a
transaction going from Assets:Restricted:Google Play to Expenses:Computer
Software.

If instead my Google Play balance is zero when I buy something, that's a
transaction going from Liabilities:Credit Card to Expenses:Computer
Software. If it's not enough to cover the transaction, I haven't actually
found out what happens but I would assume you pay using two methods, so
that's just a split transaction.
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Re: [GNC] liability or expense

Baldero Mendoza
In reply to this post by Stephen M. Butler
Wow, what a great help group! Lots of great advice from many
knowledgeable people.

I settled on making an expense account out of google play
("Google_play_stuff") and matching it to a checking account, skipping
the credit card part since, with me, that is always transitory and
instantaneous anyway. (Hope that doesn't bite me down the road.)

Maybe it's unimportant but I do like not having those red negative
numbers on the accounts, even if everything does seem to balance.

Thanks everybody! Also, I hope I did the "cc" thing correctly.

On Mon, Aug 6, 2018 at 5:50 PM, Stephen M. Butler <[hidden email]> wrote:

> On 08/06/2018 02:27 PM, Adrien Monteleone wrote:
>> Certainly, if you have a card tied to the account and you are charged for each purchase on the spot, then no need for the mess I described.
>>
>> When you purchase:
>>
>> Dr. Expenses:Entertainment (software, whatever)
>> Cr. Credit Card (the one that will be charged)
>>
>> Use ‘Google Play’ as the Description for the transaction and the actual title purchased as either the Note or the Memo on the expense split.
>>
>> When entering expenses, I generally use the Description field for the ‘Vendor’ being paid. (who I purchased from)
>>
>> Otherwise, when you pay the credit card bill, that’s like any other situation, as Google Play is no longer part of the equation as Stephen noted.
>>
>> Regards,
>> Adrien
>
> That's the "fun" side of accounting.  So many ways to do the same
> thing.  Only your CPA knows for sure how you should do it -- and that's
> because it will be how s/he wants it done.
>
>>
>>> On Aug 6, 2018, at 4:20 PM, Stephen M. Butler <[hidden email]> wrote:
>>>
>>> On 08/06/2018 01:59 PM, Baldero Mendoza wrote:
>>>> Please be patient with me - brand new to this.
>>>>
>>>> Household financial stuff. I want to post a "google play" purchase.
>>>> Should I post as an expense or a liability?
>>>>
>>>> I have accounts open for things like "electricity" and that seems to
>>>> work just fine, but "google play" looks like it works sort of like a
>>>> credit card, so I listed it under  "liabilities", and that seems to
>>>> work too. I made the connected account "checking" and it all seems to
>>>> balance and work.
>>>>
>>>> However, what bothers me is that the "google play" entry under
>>>> "liabilities" is listed as a red negative number. So I have two red
>>>> negative numbers listed now, one under "liabilities" and one under
>>>> "google play". Everything balances, so is it okay or should I place
>>>> "google play" purchases as "expenses"? (I just started gnucash so
>>>> there aren't any credit card or debit card purchases yet.) The
>>>> "expenses" stuff gets listed as black positive numbers even though
>>>> they're an outflow of money just like the "google play" stuff under
>>>> "liabilities". Maybe it's optional and can be done either way?
>>>> Confusing.
>>>>
>>>> Thank you everybody!
>>>> _______________________________________________
>>> All  of us were brand new at one point.  I'm not much past that stage
>>> either.
>>>
>>> I'm not a CPA nor a book-keeper (though am married to an accountant and
>>> have written accounting software), so this is just my opinion.
>>>
>>> 1.  I would make an expense category for "Software" rather than tying it
>>> to "Google Play" -- but that's just my approach.  Would make it an
>>> expense though.
>>>
>>> 2.  The Google Play items (at least some of mine) get charged off to
>>> your credit card.  That would be a Liability account (short-term).
>>>
>>> 3.  So, the two sides for the transaction (purchase) would be the
>>> expense (Software or Google Play) and CreditCardClearingAccount (Liability).
>>>
>>> 4.  When you pay off the credit card, the transaction would be the
>>> CreditCardClearingAccount (to reduce toward zero) and the Checking
>>> Account (Asset) from which the payment was made.
>>>
>>> Hope this helps clarify your thinking.
>>> --
>>> Stephen M Butler, PMP, PSM
>>> [hidden email]
>>> [hidden email]
>>> 253-350-0166
>>> -------------------------------------------
>>> GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8
> _______________________________________________
> gnucash-user mailing list
> [hidden email]
> To update your subscription preferences or to unsubscribe:
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> If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
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Re: [GNC] liability or expense

Stephen M. Butler
On 08/06/2018 11:15 PM, Baldero Mendoza wrote:

> Wow, what a great help group! Lots of great advice from many
> knowledgeable people.
>
> I settled on making an expense account out of google play
> ("Google_play_stuff") and matching it to a checking account, skipping
> the credit card part since, with me, that is always transitory and
> instantaneous anyway. (Hope that doesn't bite me down the road.)
>
> Maybe it's unimportant but I do like not having those red negative
> numbers on the accounts, even if everything does seem to balance.
>
> Thanks everybody! Also, I hope I did the "cc" thing correctly.

And another way to treat Google Play -- like a debit card that directly
hits the checking!

> On Mon, Aug 6, 2018 at 5:50 PM, Stephen M. Butler <[hidden email]> wrote:
>> On 08/06/2018 02:27 PM, Adrien Monteleone wrote:
>>> Certainly, if you have a card tied to the account and you are charged for each purchase on the spot, then no need for the mess I described.
>>>
>>> When you purchase:
>>>
>>> Dr. Expenses:Entertainment (software, whatever)
>>> Cr. Credit Card (the one that will be charged)
>>>
>>> Use ‘Google Play’ as the Description for the transaction and the actual title purchased as either the Note or the Memo on the expense split.
>>>
>>> When entering expenses, I generally use the Description field for the ‘Vendor’ being paid. (who I purchased from)
>>>
>>> Otherwise, when you pay the credit card bill, that’s like any other situation, as Google Play is no longer part of the equation as Stephen noted.
>>>
>>> Regards,
>>> Adrien
>> That's the "fun" side of accounting.  So many ways to do the same
>> thing.  Only your CPA knows for sure how you should do it -- and that's
>> because it will be how s/he wants it done.
>>
>>>> On Aug 6, 2018, at 4:20 PM, Stephen M. Butler <[hidden email]> wrote:
>>>>
>>>> On 08/06/2018 01:59 PM, Baldero Mendoza wrote:
>>>>> Please be patient with me - brand new to this.
>>>>>
>>>>> Household financial stuff. I want to post a "google play" purchase.
>>>>> Should I post as an expense or a liability?
>>>>>
>>>>> I have accounts open for things like "electricity" and that seems to
>>>>> work just fine, but "google play" looks like it works sort of like a
>>>>> credit card, so I listed it under  "liabilities", and that seems to
>>>>> work too. I made the connected account "checking" and it all seems to
>>>>> balance and work.
>>>>>
>>>>> However, what bothers me is that the "google play" entry under
>>>>> "liabilities" is listed as a red negative number. So I have two red
>>>>> negative numbers listed now, one under "liabilities" and one under
>>>>> "google play". Everything balances, so is it okay or should I place
>>>>> "google play" purchases as "expenses"? (I just started gnucash so
>>>>> there aren't any credit card or debit card purchases yet.) The
>>>>> "expenses" stuff gets listed as black positive numbers even though
>>>>> they're an outflow of money just like the "google play" stuff under
>>>>> "liabilities". Maybe it's optional and can be done either way?
>>>>> Confusing.
>>>>>
>>>>> Thank you everybody!
>>>>> _______________________________________________
>>>> All  of us were brand new at one point.  I'm not much past that stage
>>>> either.
>>>>
>>>> I'm not a CPA nor a book-keeper (though am married to an accountant and
>>>> have written accounting software), so this is just my opinion.
>>>>
>>>> 1.  I would make an expense category for "Software" rather than tying it
>>>> to "Google Play" -- but that's just my approach.  Would make it an
>>>> expense though.
>>>>
>>>> 2.  The Google Play items (at least some of mine) get charged off to
>>>> your credit card.  That would be a Liability account (short-term).
>>>>
>>>> 3.  So, the two sides for the transaction (purchase) would be the
>>>> expense (Software or Google Play) and CreditCardClearingAccount (Liability).
>>>>
>>>> 4.  When you pay off the credit card, the transaction would be the
>>>> CreditCardClearingAccount (to reduce toward zero) and the Checking
>>>> Account (Asset) from which the payment was made.
>>>>
>>>> Hope this helps clarify your thinking.

--
Stephen M Butler, PMP, PSM
[hidden email]
[hidden email]
253-350-0166
-------------------------------------------
GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8

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