Recording expense opening balance

[Mike or Penny Novack]

>On Sat, 3 Oct 2009 04:29:41 pm maljam5 wrote:
>  
>
>>How do I record an expense opening balance. For instance, if I set up an
>>expense account for 'phone bill' and I know that I have already spent $500
>>year to date, what transfer account would I use to record this amount so
>>that at the end of the year I can print a report on the total spent for the
>>year?
>>    
>>
>
>By definition, you can't open your books with an expense already incurred.  As 
>I see it, you have two options:
>  
>
Accounts of type "income" and "expense" are actually temporary accounts 
of main type "equity".

In this case you want to open your books as of some date in the middle 
of the year BUT you can still use the date of the start of the year for 
the opening transaction. Now you create an  account (under equity) with 
name such as "gains and losses up to xxx" (where xxx is the actual start 
date) and you use this account for the other side of the split 
transactions entering YTD so far income and expense items.

You are adjusting the total of "equity" that was created by the opening 
entries.

Michael