How to work with Prepaid transport card

[Buddha Buck]

On Thu, Jan 3, 2013 at 5:17 PM, AmadorC <amador.cervera at gmail.com> wrote:
> Oh, this looks OK, I never thought of a liability account...
> Thanks a lot!

No problem.  It's sort of the opposite of the pre-paid expense
problem: If you buy $1200 of building insurance for a year, how should
you record the expense?  You didn't "use up" the entire amount of the
insurance in the first months accounting period, so you shouldn't
expense it all then, anyway.  So you create an "Asset:Prepaid
Insurance", transfer the $1200 to it when you buy the insurance, and
then transfer $100/month to "Expense:Insurance".

I have a similar problem, in that at the beginning of the year I get
$1040 in a "Flexible Spending Account" at work.  As of 1/1, I can
spend the entire $1040 on appropriate expenses, at any time, but I get
$20/week deducted from my salary.  In this, it works the same as your
Travel Card, except over a year.  It has additional complications,
though: If I leave my company, I stop paying for it, but don't have to
pay back the unspent portion (so I'd record that as a one-time income
cancelling out the liability).  If I don't spend it all by the end of
the year, the remaining balance reverts to my company (so I'd record
that as a one-time expense cancelling out the asset).