Credit Balance on new Expense Account

[Derek Atkins]

Well, you can do it two ways..

1) Against Eq:O-B..  Then as you eat up the credit you just make bills
   against Eq:O-B in the other direction until all the credit is eaten up.
   Then you continue on from A:Checking

2) Make an Asset Account for the opening credit, and have your bills
   come from that Asset account until the credit is used up.  Then continue
   from your checking account.

Either way works.  IANAA so I dont know if one way or the other is more
GAAP than the other.

The key is making sure the transactions flow in the correct direction.

-derek

Quoting Tad Marko <tad at tadland.net>:

> On Fri, Jan 12, 2007 at 12:21:35PM -0500, Derek Atkins wrote:
>> Nah!  Just record it against Equity:Opening Balances
>>
>
> OK, so then the account will have the correct 1/1/2007 balance, but
> then how do I indicate debits against that balance in that one
> account? Maybe my understanding of expense accounts is flawed:
>
> What I think is that under normal circumstances, I get my phone bill
> and I pay it out of my checking account. I put, say, a $35.00 debit in
> the checking account to the telephone expense account. One entry in
> two places, a negative in the checking account and a positive in the
> telephone account. Am I done, or did I need to somehow put a negative
> in the telephone account so its balance stays zero? Or does its
> balance increase all year, reflecting the sum of my telelphone
> expense?
>
> Thanks,
> Tad
>
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-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available