Split Transactions question

[plussier@mindspring.com]

In a message dated: Thu, 21 Feb 2002 21:48:31 EST
waxmop@gtcinternet.com said:

>I'm not sure how to book a transaction.  My job reimbursed me for a class
>I'm taking.

I'm in the same situation, well, really, it's my wife, but I'm the 
one "keeping the books" :)

> First, I paid for the class from my checking account:
>
>	credit: asset checking account
>	debit: expenses education account
>
>Now I got the check from my job in order to reimburse me.  The
>reimbursement was added into my regular biweekly paycheck.  My regular
>salary is $100 per paycheck (these are made up numbers) and the
>reimbursement is for $200, so I got a check for $300 this time.  
>
>Here's how I normally process my paychecks:
>
>	debit: asset checking account
>	credit: income salary account.
>
>Now, looking at my monthly reports, this casts the illusion that I got a
>raise, and that my expenses have gone way up because I initially paid for
>the class and then was reimbursed.
>
>I'd be super grateful for any pointers in how to process this.

IANAA, but I think the way this *should* be handled is this:

Money initially flows from:

	(Assets) Checking acct to (Expense) Education acct.

You get paid, and the money flows from:

	(Income) Salary accout to (Assets) Checking.

So, yes, it might look as if you got a raise, but you can create a 
secondary or child "income" account:

	Income->Salary
	Income->Re-imbursements
	Income->Re-imbursements->Travel
	Income->Re-imbursements->Education
	Income->Re-imbursements->Misc. Expenses

Technically *you* are paying for your class and then work is paying 
you.  It is technically income you are receiving.  The confusing part 
of it is that you're paying the school and work is then paying you.
It would be a whole lot easier if work just paid the school :)

So, what you could have going on is something like this:

Money initially flows from:

	(Assets) Checking acct to (Expense) Education acct.

You get paid, and the money flows (split across accounts) from:

	Income->Salary to (Assets) Checking
	Income->Re-imbursements->Education to (Assets) Checking

This way your salary account accurately reflects your salary, and you 
get to see exactly what your educational re-imbursements were, which 
are also a "benefit" of your job just like your salary.

Now, the above is probably the way it *should* be done.  But that's 
not the way I've handled it so far (bad me :)

What I've done is this:

Money initially flows from:

	(Assets) Checking acct to (Expense) Education acct.

The re-imbursement check comes in:

	(Expense) Education acct credits (Assets) Checking acct.

So if I look at the Education acct the balance should be $0, which 
accurately reflects the fact that *I* spent $0 on education.

Now, the only reason I do this is that 1) I'm lazy, and 2) my wife's 
re-imbursement checks are separate from her pay checks.

You could do the same thing with your pay check, just disregard the 
fact that it's coming from your employer.  Make the transaction look 
like this:

	(Income) Salary -> (Assets) Checking		$100
	(Expenses) Education ->  (Assets) Checking	$200

Now you have a $0 balance in Education, and the transaction in the 
Checking acct register shows up as coming back from Education, so you 
know you were re-imbursed.

I hope that helps.  FWIW, I'm thinking about migrating over to the 
first method I described by creating an Income->Re-imbursements 
account, just to more accurately track where money comes from and 
goes to.