How to account for rent cheque?

[Dean Gibson]

On 2015-03-03 20:05, Michael DeBusk wrote:
> ... Please, do yourself a favor and don't use accrual accounting. It's 
> so very not worth the trouble for personal books. People who use the 
> accrual method go to school to learn all the ins and outs. 

I disagree.  If everyone makes accrual accounting mysterious or 
complicated (it's not), then a lot of users won't take advantages of the 
real features of accrual accounting.  If someone pays every bill when 
they get it, and never does any budgeting (even short-term), and doesn't 
want to learn anything more than simple expenses, then maybe you are 
right.  But if someone wants to LEARN, I don't see the point in 
discouraging them.

Accrual accounting is valuable not only for long-term obligations, but 
also for short-term ones (like monthly bills).  I divide my liabilities 
into long-term and short-term ones.  The short-term ones are divided 
into credit card accounts, and accounts payable.  The sum of those two 
(GnuCash automatically displays the total on the chart-of-accounts page) 
are what I need to pay in the next 30 days or so.

Most of the times that I run GnuCash, I go online to retrieve credit 
card and bank transactions:

 1. The credit card transactions post as debits to expenses, and a
    credit to the credit card liability account.
 2. When I receive a credit card paper bill, I reconcile the account,
    which debits the credit card liability account and credits the
    corresponding account-payable account.
 3. When I receive a utility bill, I debit the utility expense account
    and credit the corresponding account-payable account.
 4. When I pay either bill at a later time (this being the whole point
    as far as I am concerned), I pay electronically, and the next online
    bank access (the bank info is never more than a banking day old),
    records the credit to the bank account, and (automatically by
    GnuCash after the first time) debits the appropriate
    accounts-payable account.  I prefer letting GnuCash post the ACTUAL
    "check" transactions a day after I pay, rather than subject myself
    to manual data entry the day before.

Steps #1 and #4 are automatic, and steps #2 and #3 take less than a 
minute, once a month for each bill (eg, less time than it takes for 
GnuCash to load).  This process gives me a lot of information, right on 
the chart-of-accounts page:

 1. I see my current (unbilled) credit card transaction balance as well
    as the amount of the last bill.
 2. The difference between my current liabilities and my checking
    account is my available cash for the next month (and as such it
    reflects bills that I have not yet paid).

Taking a course in accounting is certainly helpful, although I think a 
good book is sufficient.  The most important thing (in my opinion) is to 
spend a little time and get one's head around the concepts.  A bit of 
practice at being pedantic helps.

I do admit I'm a bit pedantic.  When I get a paycheck, I record each of 
the deductions as part of the deposit.  Most of the deductions are 
expenses, but the withholding for income tax I post to a "pre-paid 
taxes" asset account (because I don't know the actual expense amount).  
When I do my income tax filing, is when I post the actual (ie, known) 
tax obligation as an expense, with a credit to the pre-paid taxes 
account, and an adjustment to my checking account or an 
accounts-receivable account.