Pls help model this situation

[Maf. King]

On Tuesday 20 July 2010 14:05:40 jhw wrote:
> Hi Jim, thanks a lot for your quick response.  It's probably because I
> can't get my head round basic accountancy principles, but I still can't
> seem to grok this.

Hi,

I think you maybe need to add some Asset and Liability accounts here (both to 
GC and your thought process).

If he owes you money, it is actually an asset of yours.  Likewise, if you owe 
money then it is your liability.

>
> Does this mean that when I pay the farrier, I don't enter a transaction
> from Checking to Expenses:Horse but instead transfer the amount to A/R? 
> What happens then if he doesn't pay for that particular bill - do I
> transfer from A/R to Expenses:Horse?

Yes, that is how I would do it.  It isn't an expense (to you).  
How would it be if you had physically loaned him a $10 bill to buy something 
with?  You would record that he owed you money, not that you had bought 
something.

>
> What about owing child support? 

Say the he is supposed to pay you $100 on the 1st of the month, but doesn't.
that money is then owed to you, so should appear as  a transfer from something 
like
Income:ChildSupport to Assets:OwedbyHim.  
when the money actually arrives, transfer from the Asset account to Checking


>- apart from the fact that Income is then shown as a
> total of $2720, because gnucash sums the absolute values for some reason. 

Have you got the account type set correctly, because that sounds like odd 
behaviour!

HTH,
Maf.


> So while I understand how I can put new amounts for physical expenses into
> A/R when I pay bills, I don't see where money like the missing child
> support is supposed to come from.  Well I know the person it's supposed to
> come from, just not the gnucash account!
>
> Sorry for being so dim.  Any help you can dispense is most welcome.



-- 
Maf. King
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