Payable Liabilities to expenses via assets (how to) ?

Cam Ellison cam at ellisonet.ca
Tue Dec 2 21:01:41 EST 2008


Raphaël Maville wrote:
>
> Well, I will better explain what I mean with an example, before my
> questions on HOW TO set and use it:
>
> I have three accounts:
> - Liabilities:Account_Payable:XXX
> - Assets:Bank:YYY
> - Expenses:ZZZ
>
> I have a monthly transaction, with the prices known and given at the
> beginning of the year.
>
> I use to have the Bank accounts to be exactly the same as the monthly
> bank statements: the lines have to be the same, no more lines. I prefer
> to use GnuCash like this, It is easier to follow my bank accounts.
>
> I want the transaction to be in an expense account, because I have to
> make a yearly Income-Expenses book to calculate the Year Benefits,
> needed to calculate the Tax on Benefits I have to pay for the year.
>
> I would like to have an Assets-Liabilities book too, because... I want
> to! (it is hard to explain).
>
> With a loan, when I borrow some money, the money comes from an income
> account to an asset account (bank) and then goes to an expense account
> when I buy something (please forget the interests in this example), and
> with a liability account: the loan to pay!
>
>   
A loan is a liability account.  It is not a payable.  A payable occurs 
when someone provides you with goods or services and invoices you 
instead of requiring you to pay before or at the same time that you 
receive the goods or services.  I do not think, from what you say below, 
that you need to set up payables.  That is something for business 
accounting, not for personal accounting.
> But in the present case, I do not know if I can create a payable
> liability account like I want, because the money that I want to put in
> it at the beginning of the year comes from no where (it could be the
> main problem ?), and I don't have the money in an asset account nor an
> income account to transfer in, it is fully "virtual".
>   
I am not sure what you mean here.  Let me try this example, and then 
tell us in what ways it is like or unlike what you are trying to do.

Let us say I purchase a book, and rather than pay cash for it, I use my 
credit card.  I open the credit card register (Liabilities:Credit Card), 
and enter the purchase using Expenses:Books as the other account.  Over 
the course of the month, I make several other purchases, and I enter 
them in the same way.  Each appears in the credit card account.  When 
the credit card statement comes at the end of the month, I reconcile 
Liabilities:Credit Card to it, and make a payment (let us say that I 
write a cheque).  To enter that, I open the Assets:Current:Chequing 
register and enter the amount of the cheque.  The other account in this 
transaction is the Liabilities:Credit Card account.

If I buy two different things with the credit card in one transaction, I 
need to use the Split function in the Liabilities:Credit Card register 
to show some of the total transaction going to one Expenses account, and 
the remainder to another Expense account.  This way, items will show up 
in the Expense accounts that are proper for them, the credit card debt 
increases and then decreases as purchases, and then payments, are made, 
and the Chequing account also increases and decreases as you put income 
into it and write cheques.

Tell us whether or not this makes sense to you, clarify your question, 
and then let us deal with that.

Cheers

Cam






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