Handling Purchase Advances
sanjaychak02 at gmail.com
Thu Jun 20 09:03:39 EDT 2013
Thanks to everyone for the great inputs. I will use a liability account to
record these transactions.
From: Cat P [mailto:barking at gmx.com]
Sent: 20 June 2013 17:26
To: Buddha Buck
Cc: Sanjay Chakravarty; GnuCash Users List
Subject: Re: Handling Purchase Advances
In fact, apologies for the mistake.
It is a liability account as I would have recorded it myself, and not
A/Receivable, of course (A/Payable at most).
On 20/06/2013 12:50, Buddha Buck wrote:
> The other folks have the right idea: record the transactions as they
> I just disagree with them as to how they should be recorded.
> You are incorrect that the transactions have no impact on your finances.
> At the end of the day, your bank account is $100 greater, and your
> wallet is $100 lesser.
> Here's how I'd record them:
> 1. My friend gives me $100 to buy an item. He deposits the amount in
> my bank.
> Debit $100 to Assets:Checking
> Credit $100 to Liabilities:My Friend (or some similar liability
> Your friend is giving you $100 in the expectation that it (or equal
> value) will be returned. Until that is done, you owe him $100; that's a
> 2. I already have $100 in my wallet, so buy the item for $89 from my
> wallet. So balance $100 is to be paid back to my friend.
> Debit $89 to Liabilities:My Friend
> Credit $89 to Assets:Wallet
> This recording assumes that the item immediately goes into the
> possession of your friend, and thus can cancel the debt immediately.
> Practically, that's probably not the case, and you are holding on to
> the item until you meet your friend. In which case, an alternative choice
> Debit $89 to Assets:Miscellaneous (or some other appropriate asset
> account) Credit $89 to Assets:Wallet
> 3. When we meet, I return $11 in cash to him from my wallet.
> Debit $11 to Liabilities: My Friend
> Credit $11 to Assets:Wallet
> If you recorded the item you bought for your friend as an asset, and
> you gave it to him when you gave him the $11, that would be:
> Debit $100 to Liabilities: My Friend
> Credit $89 to Assets:Miscellaneous
> Credit $11 to Assets: Wallet
> If you look over the set of transactions listed above, the net result
> is a
> $100 debit to Assets:Checking, and a (combined) $100 credit to
> Assets:Wallet. Every other account has balanced debits and credits,
> no income, expense, or equity accounts were involved, and Liability
> accounts were used to represent money/things you owed to others while
> Asset accounts were used to represent money/things you possessed.
> On Thu, Jun 20, 2013 at 6:16 AM, Sanjay Chakravarty
> <sanjaychak02 at gmail.com>wrote:
>> Dear All,
>> Here is a scenario I want to record in gnucash but I don't know how.
>> 1. My friend gives me $100 to buy an item. He deposits the amount in
>> my bank.
>> 2. I already have $100 in my wallet, so buy the item for $89 from my
>> So balance $11 is to be paid back to my friend.
>> 3. When we meet, I return $11 in cash to him from my wallet.
>> Usually I use Assets::Reimbursements when purchases are made in
>> advance for someone (like official), and I get reimbursed exact
>> amount. Here, an advance is being made, and that too into the bank.
>> How do I setup the above 3 transactions in gnucash?
>> gnucash-user mailing list
>> gnucash-user at gnucash.org
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