Monthly budgeting for non-monthly expenses

[Phil Longstaff]

Dan Werner wrote:
> Hi, I've been using basic functionality in gnucash for a while, and
> I'd like to start getting more out of it.  A specific thing I've been
> wondering about is: how do you budget for something monthly that you
> only pay for once or twice a year?
> 
> As an example, I pay auto insurance in June and December, but I'd like
> to budget in the partial, yearly expense for that each month.
> Meaning, I'd like to take the expected yearly expense for my car
> insurance, divide it by 12, and move money from my checking account to
> some fake (bank?) account in gnucash.  Then, when one of the payments
> was due, I'd create an expense in the fake acct to pay the bill.
> 
> Is it correct in a gnucash/accounting sense to do something like that,
> or should I abandon the idea?  If it sounds okay, what type of gnucash
> acct should the fake acct be?

It's definitely OK from an accounting point of view.  I would make the
"fake" account be a liability account which is for money owed to someone
else (or some other company).

Phil