Fwd: Re: Paying Expenses

[Bill Gribble]

On Tue, Jul 17, 2001 at 06:38:03PM -0400, Nathan Matias wrote:
> My question then is where do I record how much I owe people if the
> expenses thing is where I put in how much I pay out to expenses?

That's called "accounts payable".  Make one account, of type
Liability, called Accounts Payable and it will probably behave more
like you expect.

For example, if you borrow $100 cash from a friend, you debit Cash
(make a deposit) for $100 and credit Accounts Payable for $100. In the
Cash register in single-line mode (splits not shown), this just means
making a $100 Deposit and listing Accounts Payable in the account
column.  Then your register shows you have $100 cash and $100 debt,
net worth 0.  When you pay it back, you credit Cash $100 (withdraw)
and debit Accounts Payable $100.

If you receive a bill for your electricity or something but it's not
due for a while, you can put it in Accounts Payable too.  When you
receive the bill, you open the Bills:Electricity expense account and
make a new entry crediting Accounts Payable $100.  The $100 goes in
the "Expense" column in the expense account register.  Then when you
pay the bill, you debit Accounts Payable $100 and credit Checking
$100.

b.g.

btw: I'm using "debit" and "credit" in the accounting sense, which is
probably opposite of your usual usage of the terms.  To "credit" a
bank account means to take money OUT of it, and to "debit" a bank
account means to put money IN it.