What's the best way to record this?
Lincoln A Baxter
lab at lincolnbaxter.com
Sun Jan 2 22:50:25 EST 2011
On Sun, 2011-01-02 at 20:48 -0500, Michael DeBusk wrote:
> "Ryan Flegel" <rflegel at gmail.com> wrote:
> >What's the best way to record this?
> Using a liability account is the correct way. I see nothing wrong with doing it the other way, though, if it's a one-time thing.
I don't think so... when someone owes you money, it is a liability for
THEM, and an ASSET for you. The correct way to record this is with an
Asset account. All loans YOU make to others, are assets to you. All
money borrowed from others are your LIABILITIES. (Think Credit Card --
which is a liability to you -- and an asset to the bank) When you lend
you are the bank.
I have a asset accounts for each person that owes me money:
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