Opening a new account

[Tommy Trussell]

On Wed, Dec 31, 2014 at 10:10 AM, Ken G. <beachkidken at gmail.com> wrote:

> Greetings:
>
> I was given a grocery store gift card in the amount of twenty dollars. In
> keeping track of it, I did the following:
>
> Debit Asset Account:
>
>     Kroger Gift Card $20.00
>
> Credit Income Account:
>
> Kroger Gift Card            $20.00
>
>
> Later on, I kept wondering if I should have use the following:
>
> Debit Asset Account:
>
> Kroger Gift Card
>     Opening Balance    $20.00
>
> Credit Equity Account:
>
> Kroger Gift Card
>     Opening Balance            $20.00
>
>
I am not an accountant, (but I do my own bookkeeping using GnuCash for
myself and others).

Here's how I would suggest thinking of it:

The gift card is what folks call a "stored value card." You can buy generic
credit cards that work exactly the same way (but watch out for the fees).

Here's how I would suggest doing it, especially if you expect to keep using
it (many can be replenished for free at the store, and the store may offer
incentives for you to use it).

Create an Asset account for this (and if you keep track of several, make it
as hierarchical as you need.

Assets:Current Assets:Kroger Card
or
Assets:Current Assets:Store Cards:Kroger

To register your receipt of it, either you bought it (using a transaction
from another asset account) OR it was a gift. If it was a gift, make a
transaction to the card using the two accounts. From the perspective of the
card:

Income:Gifts $20 (out)
Assets:Current Assets:Kroger Card $20 (in)

I haven't tried to make columns here because they might not show up in
email. If you open the Income account the columns will be switched.

When you spend from the card, enter the transactions in the Kroger Card
account using your existing expense categories:

Expenses:Food
or
Expenses:Entertainment
(or whatever)

You can have as many splits as you need/want to account for each item (or
category of items) you bought in each transaction.

If you somehow manage to spend through the vast $20 stored on the card and
need to use a credit card or cash to pay for the rest of your items, you
can enter a split transaction that includes more than one payment category,
too.


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