Basic Accounting: Short Term vs. Long Term Expenses

[Dale Alspach]

You probably want to research this further if you want to be "correct"
(GAAP) but a common way to do this is to have some accounts labeled
current which is roughly equivalent to your short term. This is more
appropriate for an accrual basis.

For personal accounting purposes you may find that the inelegant solution
actually works pretty well. I find that transactions to certain 
accounts tend to be almost all short term or almost all long term.
You may also want to consider whether all of
your long term expenses are actually expenses rather than assets. I think I
would consider a $1000 bike an asset. Some people use a combination of life
and cost to classify purchases, e.g., if it will last more than a year and
costs more than $250, it is an asset.

The problem (for me) with using expense accounts (without duplicating the
account tree) to separate short and long term
expenses comes with something like a vacation. During a vacation you eat,
buy gasoline, etc. These normally are short term expenses but if you saved
for six months for your vacation and you eat at more expensive restaurants,
etc., during your vacation, throwing these into the short term expenses
distorts everything.

Dale Alspach