Keeping track of small debt between friends, both ways

[Maf. King]

On Tue 4 August 15 10:07:11 Pedro Emílio Machado de Brito 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,

Hi Pedro,

You just need to choose a type - Asset or Liability with a negative balance is 
fine.

Just go with whichever you think is most appropriate - if you do most of the 
lending then asset, but if you borrow more frequently, make it a liability, 
then the -ve balance is less often the case...

Or choose the type based on the state of the account today!

HTH,
Maf.