Accounting Question

David T. sunfish62 at
Sun Oct 15 01:46:20 EDT 2006


But what if you record this as an expense, and (for want of a better term) the
payback as an *anti-expense*? If you register this transaction as a business
expense, and then record the payment against the same expense account, the two
will cancel each other out, and you will have no liability either way, since
the end result will be zero.

And isn't that really what is going on here? You're laying out money that gets
returned to you later, so there's no net change on you (although the idea of
this as a loan certainly gets me thinking!). 

FWIW, I've always done these as expenses, since it's out of my pocket first.
And if they don't fully reimburse, then I've got an expense that is deductible.


--- Anthony <gnucash at> wrote:

> On 10/12/06, Paul Schwartz <pmjs1115 at> wrote:
> > Perhaps it would not be as confusing if you had an account that you called
> "Reimbursements". However, it probably ought to go under the Income headings
> in order to maintain an accurate measure of Cash Flow. Same kind of reasoning
> applies to the "Expense".
> >
> > HTH
> >
> > Paul
> >
> Thinking about this a bit more, recording this as an expense and
> income is almost definitely a bad idea.
> Consider just a slight change, where instead of paying for a hotel
> you're paying for a meal.
> Meals and entertainment are generally only 50% deductible.  If you
> recorded income and an expense, you'd have to pay taxes on the other
> 50%.  However, meals which are billed to a customer and separately
> stated on an invoice at their full cost are 100% deductible.
> So you definitely wouldn't want to just lump the cost of the meal into
> an expense for meals.  To handle this situation I guess you could have
> a separate expense account for reimbursed expenses, which would be
> 100% deductible.  But unless you're in the business of reselling
> meals, I think this would overstate your revenues (which generally
> doesn't matter for tax purposes, but might matter for other reasons).
> Anthony
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