Basic Accounting: Short Term vs. Long Term Expenses

Cayenne cayennes at gmail.com
Wed Oct 5 18:30:27 EDT 2005


On 9/27/05, Greg Novak <novak at ucolick.org> wrote:
> 3) Group asset/liability accounts into "Day-to-day cash flow" and "Long
> term cash flow."  That is, the account tree would look like:
>
> --Short Term
> ----Checking
> ----Cash
> ----Credit Card
> --Long Term
> ----Savings
>
> This would go against the seemingly near universal practice of grouping
> accounts by asset/liability.  However, it would have the nice effect that
> credit card purchases couldn't sneak in and wreck the books.  The down
> side to this scheme is that it may clash with the physical bank accounts.
> Ie, I couldn't use the _same_ credit card for both short and long term
> purchases.

Here's what I do, that doesn't have this problem:

Assets
-- Checking
---- Short term
---- Long term
-- Savings
---- Short term
---- Long term

This way, everything in my checking account is under the checking
account and everything in the savings account is under the savings
account.  When I want a report of my short term funds I select the
short term subaccounts and when I want a report of everything I select
all of them.

Also, one can make transfers between savings and checking, within the
same type of subaccount, without anything getting thrown off.

- Cayenne

(P.S. I apologize to Greg for the duplicate due to sending this first
to him before I remembered what button I needed to press in Gmail to
have it go to the list.)



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