Accounting for credit card purchases (revisited)

[Derek Atkins]

cscott at endjinn.net (Christopher Scott) writes:

> Sorry, I wasn't clear there.  Assets:Checking (Reserved) is a
> sub-account of Assets:Checking.  It actually is
> Assets:Checking:Reserved.  

Clarity is everything!  Thank you for correcting your statement.
Your revised statement makes more sense.

>   The Assets:Checking:Reserved account is
> correct, but the Assets:Checking account is off by the amount of the
> payment, since the $500 never came out of the Assets:Checking account.  

Um, the $500 came out of the Assets:Checking during the 5 of these
transactions:

>> > Liabilities:Credit Card             CR 100
>> > Expenses:Food                       DR 100
>> > Assets:Checking (Reserved)          DR 100
>> > Assets:Checking                     CR 100

Each one of these moves money from A:C to A:C:R.  The _total_ balance 
of A:C remains the same, but the immediate balance of A:C is reduced
(and A:C:R increased) by the second set of splits in this transaction.

Then when you create the actual payment transaction:

>> > Assets:Checking (Reserved)          CR 500
>> > Liabilities:Credit Card             DR 500

it removes those funds from A:C:R, so your total A:C balance should
now be $500 lower.

All is balanced, now.  So, this is all correct.

-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available