Accounting best practice question

[Ariel]

On Fri, 2 Feb 2007, Eric Ladner wrote:

> For debit items coming in from other places (i.e. a reimbursement on a
> credit card, cash from another person for something I bought for them
> that shows up as a line item), what's the best way to reflect this in
> the accounts?

I created an account called Liabilities:Loans:Misc - items of that sort 
get placed there.

So if I buy something for a friend I enter a Decrease entry into that 
account from checking or cash.

When my friend pays me back I transfer from there to cash, or checking.

Same is true for reverse if someone buys something for me - I'll enter say 
Liabilities:Loans:Misc (increase) to Expenses:Clothing

A problem with this is that it's not easy to tell who owes you what. I 
(ab)use the Cleared column for this - if the transaction is fully payed 
of, I mark it as cleared, so at least I can find the incomplete entries.

The correct way to do this is probably to create A/R and A/P accounts. But 
then you have to create customers or vendors for each situation.

 	-Ariel