Deposits as Liabilities or other?

[Ian S. Worthington]

Many thanks Wouter.  This is *so* close to what I had I couldn't understand
what the difference was for a while!

You're transferring only $38 from Income and $2 *from* Liabilities to give me
the $40 I have in cash.  That makes sense (I was trying to transfer $2 *to*
liabilities).

And the auto-complete works like a dream!  Thanks!

Looking better, I think: still trying to get my head around this stuff: my
wife's 9 year old sister knows more about accountancy than I do -- would you
believe its a compulsory subject in their school?

Off topic:  I've been using dual-boot, or even multi-boot since the days of
OS/2 (remember that).  I'm never totally happy with it and since almost
everything I use is Windows I won't be changing anytime soon.

But I've started using Linux for my Asterix-based PBX which has its separate
machine, so there's hope for me.  And now gnucash, but that has to live on my
laptop, which is XP for the forseeable future.  And VMware seems a good
solution so far.

Many thanks,

Ian
...



------ Original Message ------
Received: Mon, 19 Jun 2006 01:52:15 PM BST
From: Wouter van Marle <wouter at squirrel-systems.com>
To: "Ian S. Worthington" <ianworthington at usa.net>Cc: gnucash-user at gnucash.org
Subject: Re: Deposits as Liabilities or other?

> On Mon, 2006-06-19 at 11:52 +0100, Ian S. Worthington wrote:
> > 2. My wife's family, for whom this is for, rents widgets to a small
> > number of people. To rent a widget during the day costs, say $40 and
> > during the night costs $38.  In addition there is some sort of
> > deposit/savings plan associated with each rental of $2, which is held
> > against damages and returned at year end, or when the cutomer closes
> > their account. (If you think this is odd, you're not alone.)
> > 
> > My first though was to create a Liability to each customer and split
> > the money received to Assets:Cash and Liabilities:customer, but then I
> > actually have more cash than the account shows.
> > 
> > Can someone suggest what the correct procedure here is?
> 
> Mmm... interesting one. Indeed a little odd, that deposit fund.
> I don't think there is a single correct procedure: there may be more
> ways to reach the same result.
> That $2 is a liability indeed, but also a payable. While in your hands,
> it is an asset, and ends up in your wallet (or in the old sock under the
> bed or where-ever you keep your cash).
> I would suggest the following tree:
> 
> +
> +-+ Income (type: Income; for rental incomes)
> | +- Unit 1
> | +- Unit 2
> | 
> +-+ Expenses (type: Expenses)
> | +- (your expense accounts)
> |
> +-+ Assets
> | +- Cash (type: Cash)
> |
> +-+ Liabilities
> | +-+ Deposits
> |   +- Unit 1
> |   +- Unit 2
> 
> Now if someone pays the $40 rent for Unit 1, you book $40 as received
> Cash, and split that against $38 Income:Unit 1, and $2 that goes to
> Liabilities:Deposits:Unit 1.
> 
> Note that this is not so much work as it seems; as every day you get the
> rental payment for a certain unit, you just enter the name, and GnuCash
> fills in the rest like the previous one, including the transaction
> splits.
> I split out the different units, so you can see immediately which unit
> has how much in deposit, and which unit has brought in how much in rent.
> 
> Other assets (the value of the units themselves) of course end up under
> Assets, etc. This way you should get the correct amount of cash (there
> you book the full amount) and also the correct total income. And with
> the expenses you can easily keep track of your cash flow and
> profitability.
> 
> Good luck!
> And, off topic, why not set up a dual boot to Linux or ditch Windows and
> switch? Sounds much easier to me!
> 
> Wouter.
> 
> 
> 



Ian S Worthington
...