Keeping track of small debt between friends, both ways

[Buddha Buck]

It's either an Asset or a Liability. Pick one. If you are concerned about
it sometimes having a negative balance, pick based on what you think the
typical balance would be: If you think Bob will owe you more often than you
will owe Bob, then make it an asset. If you think it's the other way
around, then make it a Liability.

My solution to similar problems is to not worry about it. If I go out to
dinner with Bob and pick up the check, it's an expense. Informally, I know
he'll pick up the check next time to "settle the debt". I don't worry that
I paid $15 for his dinner, and he paid $12 for mine (so he'd owe me $3).



On Tue, Aug 4, 2015 at 9:08 AM Pedro Emílio Machado de Brito <
pedroembrito at gmail.com> wrote:

> What is the recommended way of keeping track of debt between friends?
>
> I owe Bob $10, I pay his dinner, $15, now Bob owes me $5. I'd like to
> keep track of this in a *single* account, not two separate asset and
> liability accounts, one for when people owe me and the other for when
> I owe them.
>
> What I'm using right now is a top-level placeholder equity account,
> with equity sub-accounts for each person, but I'm not sure if this is
> the best way. It doesn't feel right to put this under Assets or
> Liabilites because it can represent either, depending on the sign of
> the balance.
>
> Cheers,
> --
> Pedro Emílio Machado de Brito
>
> Ciência da Computação 2012 - Unicamp
> Coordenador Financeiro - Centro Acadêmico da Computação (CACo)
>
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