Expense & Liabilities accounts

[Bob Plantz]

On 3/18/2012 5:08 AM, theporter2000 wrote:
> I've just created A/Cs in liabilities what are the difference between
> *Expense&  Liabilities* I'm in the UK if that makes a difference although I
> don't think It dose
>
I have a "Liabilities" account for my "Credit Card".
I have two "Expenses" accounts, "Groceries" and "Household".

If I buy $123 worth of food at the local super market and charge it on 
my credit card, $123 is entered in the "Charge" column of my 
"Liabilities->Credit Card" with "Expenses->Groceries" in the "Transfer" 
column. Now if I look at my "Liabilities->Credit Card" I have a 
liability of $123, and if I look at my "Expenses->Groceries" I have an 
expense of $123.

At some point I will "Spend" $123 from my "Assets->Checking" and 
"Transfer" it to "Liabilities->Credit Card", which then shows up as a 
"Payment" in my "Liabilities->Credit Card" account. (Well, chances are 
good that I have charged additional items on my credit card so this 
transaction will be somewhat larger than $123.)

Disclaimer: I have no training in accounting. This is simply how I do 
things, but it seems to work for me.

--Bob