Expense / account hierarchy

[Kevin Page]

Hi, I'm looking for some advice/wisdom on setting up my accounts and
categories...

I've been happily using gnucash for 16 months or so now. I started off
by categorising my expenses by type (e.g. Groceries), but within them
I've tended to created sub-categories for companies (e.g. a particular
grocery company).

Basically, it seems I care not only about the type of things I spend
my money on, but also _where_ I spent it.

This is okay, with a couple of caveats:
- some companies sell objects from more that one higher level category
(e.g. the grocery store also sells CDs)
- I often spend money on bills which are then split with other people
(e.g. my telecomms category is artificially high, because although I
do pay our telecomms company that amount, _personally_ I'm only
spending a split of that total with my housemates)

And I can see two solutions:
1) Not care! Am I really bothered about tracking both my category spend
and how much I give to Company X
2) Add an extra step to my transactions. Create a number of Liability 
accounts to represent companies. When I spend something I create a
split transaction which transfers the bill total from my credit card
account to the liability account for that company, and also transfers
out into one or more expense categories by type (and asset accounts if 
I'm paying for other people). I can then track my own personal spending 
by category, and look at how much I've spent with a particular company
based on the turnover of their liability account

Is this the only sensible (!?) way to do this? Am I missing something?
Could any of the new small business features help me?

regards,

kev