Budgeting prototype

[Dale Alspach]

Incrementing a liability or asset account as it appears bothers me. 

>Actually, the $200 budgeted for the credit card in this example is not for
>a single bill but rather the amount that this account should change over 
>the designated period (monthly in this case).  The intent is to show that at
>the end of the month I want my credit card balance to go down by $200.00.  

>Say I started out with $1000.00 balance on my visa.  In my budget I want to
>show that each month I am going to decrease that amount by $200.00  It may 
>be that I spend $100.00 for a (posh) dinner out and use my visa to
>pay for it but I would expect to pay that bill at the end of the month 
>and tack on $200.00 to decrease the outstanding balance and meet my budget.

It seems to me that a budget has to have some double entry consistency.
That $200 has to come from somewhere: income, asset conversion or
borrowing. If the budget is going to make sense from a liability, asset,
equity point of view, I should be able to dump in my financial position at the
beginning of the budget period and then run a balance sheet for six months
into the budget year to get my expected position. That balance sheet is worthless if I am able to
create or destroy assets and liabilities out of nothing. 

To make this work the budget system has to either require offsetting
entries for adjustments to assets and liabilities or there will need to be some
automatically created "slop" entries. Looking at the January column in the 
prototype shows the inconsistency.

100 is being added to a savings account, 200 is being used to pay down a 
debt, 200 goes for rent, 200 for food, and another 100 is is being added 
to assets for a holiday. It looks to me like 800 has been allocated so the 
total ( net )
should be 1200 if the total means unallocated income. The real problem is 
that the bottom summary does not make sense once liability and asset 
adjustment is in the budget. As listed only two entries were actually 
expenses, rent and food, so expenses should have been 400, dreaming (slop) 400, 
income 2000.

Perhaps someone with more accounting experience/knowledge could comment on
this.

Dale Alspach