tracking cash

[Carol Champagne]

Michael P. Soulier wrote:

> On Wed, Apr 04, 2001 at 08:34:50PM -0500, Carol Champagne wrote:
> 
>> Hi Mike,
>> In the cash account:
>> I enter the cash receipts I have, estimate the amounts for purchases I 
>> made without receipts, then do an adjusting entry to match up the 
>> account total to what's left in my wallet.  My adjusting entry would be 
>> a transfer from the cash account to an "Adjustments" expense account 
>> (call it "Misc." or whatever---just a catchall expense account for 
>> uncategorized expenses.)
> 
> 
>     Thanks Carol. Seems like it will take a lot of discipline to properly
> track those expenditures. I don't remember where I spent the money for this
> one. 
>     I guess I can reconcile my bank account, but will I ever know if the
> transfers from my cash account balance?
> 
>     Mike

You don't really have to reconcile a cash account--you don't receive a 
statement on it.  If you want to reconcile it to something, though, just 
reconcile it to the current actual cash "balance" in your wallet---the 
actual remaining cash at the time you decide to reconcile it.  You'll 
end up with a difference, and that's the amount you can just adjust to 
Expenses:Misc. (Or allocate, as Jim suggested).

I usually don't reconcile cash accounts.  I enter ATM withdrawals and 
any cash receipts/estimates I have, then I count the money left in my 
wallet and adjust the cash account to match that amount (transfer from
Cash to Expenses:Adjustments).

The individual transfers from your cash account balance because you 
always transfer some amount of money from one account to another.
Even if you have just two types of transactions--ATM withdrawals and
transfers from cash to Expenses: Misc., your transactions should be in
balance, so your accounts are in balance.  If you take out 100 from
Checking, you enter a transfer of 100 from Checking to Cash.  If you
then spend 50 on food, you transfer 50 from Cash to Expenses:Food.
If you decide the balance adjust the rest  (because you don't know
where the money went), just enter a transfer from Cash to Expenses:
Misc. for the amount you want to adjust.  Money is always going from
one account to another account (or set of accounts), so your accounts/
transactions are in balance.

Carol