Transfers between different bank accounts - How to record?
Thomas Bullock
tbullock at nd.edu
Tue Aug 11 08:35:47 EDT 2009
Hi Victoria,
When reflecting on how to record something I never have thought about before, I find it useful to find a very graphic image of what is happening. You provide the answer it seems to me in the last sentence of your first paragraph.
The first question makes me think of a cupboard with different shelves. You seem to be moving your funds from one shelf to another. However, they remain in the same cupboard, just on different shelves. In this analogy the cupboard is a set of books and the shelves are the accounts. So to answer your questions, you record the transfers as a reduction from the account the funds were in originally and an increase in the account to which they are moved. No effect on equity, nor income, nor liability. Just a move of assets from one account to another. Not knowing anything more about your chart of accounts the above is what in essence you have described.
Using the same analogy, the second questions says you are moving assets from one set of books to another. That is, you are taking assets from one cupboard and putting them into another. Since the set of books are different, you must reflect the decrease in assets with a corresponding decrease in equities in the first set of books and an increase in the recipient set of books.
Basic accounting follows the formula: ASSETS = EQUITIES [equities include interests by outsiders (liabilities) and interests by owners (capital accounts such as owner's equity, partnership interests, or corporate stocks, etc.)]. The actual recording of transactions will depend in part on the relationship between the two sets of books.
If there are ongoing relationships, then you likely have intercompany or inter-entity accounts in each set of books to record ongoing activity. If so, then those accounts would come into play. If there is no inter-entity ongoing relationship, then you simply make the appropriate transactions for each set of books, decreasing one set and increasing the other. To know the precise entries to make in each set you would have to supply more information that just professional and personal.
The above is a general response based on the degree of information you have provided.
Hope this clarifies things to some extent.
Tom Bullock
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Date: Sun, 9 Aug 2009 21:07:17 -0700 (PDT)
From: Victoria_Stuart <1 at VictoriasJourney.com>
Subject: Transfers between different bank accounts - How to record?
To: gnucash-user at gnucash.org
Message-ID: <24894079.post at talk.nabble.com>
Content-Type: text/plain; charset=us-ascii
August 09, 2009
Hi - I have several personal bank accounts, and also some investment
accounts. When I transfer funds from one to another, how are these recorded
- as an Income entry and a matching Liability entry (with these set up for
each account)? Or, is there some other way to record these transactions,
that don't affect my overall equity (just where the assets are)?
Second, same question, but for transfers between my personal bank accounts
and my professional bank account (in separate Personal and Professional
Ledgers, respectively)? In this case, my equity *is* being shifted around
(personal <> professional accounts).
Thank you in advance for any comments / clarifications - much appreciated!
Sincerely, Victoria :-)
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