What's the best way to record this?

Lincoln A Baxter lab at lincolnbaxter.com
Mon Jan 3 20:08:28 EST 2011

On Mon, 2011-01-03 at 11:26 -0600, Ryan Flegel wrote:
> On 3 January 2011 11:07, Colin Law <clanlaw at googlemail.com> wrote:
> > On 3 January 2011 16:55, FireFly <fireflys_98 at yahoo.com> wrote:
> >> --- On Mon, 1/3/11, Ian X Waddington <iwaddox at gmail.com> wrote:
> >>> To expand on this, what should you do
> >>> with an expense that is refunded
> >>> because you return something to the store.
> >>>
> >>> If I paid £50 for a new coat on my credit card against
> >>> expenses clothing
> >>> then a week later I returned the coat I would simply enter
> >>> an identical
> >>> transaction with the signs reversed - wouldn't I, how else
> >>> should I do it?
> >>>
> >>> I see this as the same as for the short term loan
> >>> question.
> >>
> >>
> >> I'll agree and disagree, you can deal with them the same, however I presume when you purchase something from the store you don't intend to return it, so as such it's an expense, then when you return it, the expense goes away.
> >>
> >> Short term loans are never expenses, you would expect it to be returned, having said that I think I deal with them the same way, but this is my personal accounting and I'm hecka lazy.
> >
> > In addition, for the case in point, buying something for a friend, you
> > might buy it on a credit card and get re-paid in cash.
> Actually, here's the whole story and how I ended up recording it.
> I needed to buy a Christmas gift on behalf of my dad for my mom. When
> I went to purchase the gift I was with roommates and we did some
> grocery shopping, too, so my roommate ended up paying for the gift.
> Later on, my dad reimbursed me for the gift.
> Here's how it went down:
> Initial purchase - A:Current Assets:Loans:Roommate -> $100 ->
> A:Current Assets:Loans:Other
>  - the "Roommate" account already existed with a balance in my favour
> and I created "Other" instead of "Dad", because I don't expect to lend
> him money very often so I didn't think he deserved his own account
> Reimbursement - A:Current Assets:Loans:Other -> $100 -> A:Current
> Assets:Checking Account
> However, after this thread I've decided to rename "Loans" to "Owed To Me".
> Thanks for the help, everyone!
If the Roommate actually purchased the gift (i.e. you borrow the money
from the roommate), it could (should) have looked like this:

Liabilities:Roommate (increase (card) $100) balanced by
Assets:OwedToMe:Dad (deposit (increase) $100)

When Dad Pays you, 
Assets:OwedToMe:Dad (debit $100) -> Liabilities:Roommate (payment --

If you paid your roommate back first then it would look like this:

Assets:Checking (or Cash): (debit $100) -> Liabilities:Roommate ($100)
(decrease (or payment)).

When Dad Pays you back, THEN:
Assets:OwedToMe:Dad (debit $100) -> Assets:Checking (or Cash): (deposit

In the end, the books should look like how the money actually flowed.


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