Proper usage / organisation of sub-accounts?

[Andy Gimblett]

Hi all,

This is probably a naive newbie question belying my lack of
understanding of fundamental principles, but...

I've been pondering sub-accounts (ie child accounts) a bit lately, and
I think I've got the wrong conceptual view of them - so I wanted to
ask for clarification & elucidation.  The way I'm thinking about them
would make more sense if a child account's transactions (and balance)
were somehow inherited (upwards) by its parent (at least in some
cases).  I realise that _isn't_ the case, so I'm wondering if I'm
going about this all wrong.

Two contexts where this is important to me are expenses and assets.

For example, on the expenses side, I'd love to do something like this:

Expenses
  Groceries
    Alcohol

Here the intent is to track spending on alcohol separately from "all
the rest of my groceries".  Thus, for example, I might set up a split
where:

  15.00 goes to Groceries (for the fruit, veg, etc. I bought)
  20.00 goes to Alcohol   (for all the wine I bought)

and 35.00 is creditted from whatever asset I use to pay for this.

An alternative, which seems less natural to me, would be:

  Groceries
    Alcohol
    Other Groceries

where, in this case, the 15.00 would go into "Other Groceries", and
the top-level "Groceries" is just an umbrella account, which is never
debitted directly.

I prefer the first solution, but in either case the problem I can
hazily foresee would be reporting.  If I want to know how much I spent
on groceries, I now need to add the values from both accounts, don't
I?  Is that straightforward?  Am I worrying too much?

The other context where I'm thinking about this is assets.
Specifically, I'm thinking that a single bank account is of course
used for several purposes, and it would be nice to partition them
accordingly (at least to some extent)...

For example, if I want to earmark part of my checking account each
month for, say, clothing, one way to do it would be to make a
sub-account there and put part of my paycheck in the clothing
sub-account.  But if the amount in that "child" account isn't also
counted in the parent account (which is supposed to reflect the actual
bank account), the parent account's balance will no longer match the
balance reported by the bank - which isn't really want I want, is it?

Hopefully this makes sense to someone.  :-) Thanks in advance for any
help or advice!

Best,

Andy

-- 
Andy Gimblett
Computer Science Department
University of Wales Swansea
http://www.cs.swan.ac.uk/~csandy/