Need help with accounting concept

[Andrew Sackville-West]

On Thu, 26 Jan 2006 12:13:38 -0500
Jim Lynch <jimlynch1 at gmail.com> wrote:

> I have a small business (very small!) that I'm using gnucash to do the
> accounting for.  I have a couple of expenses that I'm paying out of my
> personal account that I want to charge off as a business expense, such as a
> portion of my phone bill and cell bills.  I don't necessarily want to pay
> myself for that expense, but I do want to show the charges in gnucash
> somehow so the P&L and other reports will reflect actual business expenses.
> Since this is a double entry system, I need some kind of an account
> (liability?) to post the other half of the transaction to.  What's a
> reasonable way to do that?  I know I'll have to have expense accounts set up
> for phone and cell expenses, but the other side is what I don't understand
> since there won't be any actual exchange of funds.

talk to your accountant, but here's how I do it.

A bill paid by me personally on behalf of the business is essentially a capital contribution to the company so...
						DR	CR
Expense:CellPhone					25.00	
Equity:Owner:Capital Contribution		25.00

this increases my capital contributions over time.

-or-

A bill paid by me personally gets charged to an owner's payables account and future profit payments to me first go to satisfy that payable...
						DR	CR
Expense:CellPhone					25.00
A/P:owner					25.00

then later at payout time (woo hoo!)

Checking					100.00
A/P:owner						25.00
Equity:owner:distribution				75.00


hth

Andrew
	
> 
> Thanks,
> Jim.
> 
-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: application/pgp-signature
Size: 189 bytes
Desc: not available
Url : http://lists.gnucash.org/pipermail/gnucash-user/attachments/20060126/b6b73b05/attachment.bin