Keeping track of small debt between friends, both ways

[Joshua Chambers]

I like having mine in Assets, because that way if I owe someone (the
number is negative, it comes up in red, as a good reminder that it's I
who OWE.  I use accounts under Assets:Exchanges: and then one for each
person who I have these kinds of interactions with, also for deposits or
rentals and things.  I also like that then I can look at the Exchanges
total and see at a glance if I'm positive or negative overall, and by
how much, and that number figures into the Assets total so I can easily
see how much I really have when my petty debts are remembered.  I keep
proper, long term one way debt in a Liabilities account.

--Joshua

On 08/04/2015 02:04 PM, Edward Doolittle wrote:
> On 4 August 2015 at 12:58, Pedro Emílio Machado de Brito <
> pedroembrito at gmail.com> wrote:
>>
>>
>> On Tue, Aug 4, 2015 at 12:41 PM, Mike or Penny Novack
>> <mpnovack at mtdata.com> wrote:
> 
> 
> 
>>> Take your checking account for example. It's an account of type Asset
>> (under
>>> Current Assets). It would NORMALLY have a debit balance. But suppose you
>> got
>>> into an "overdraft" situation. The account would then have a credit
>> balance,
>>> you OWE the bank money, this asset is acting as a liability (a negative
>>> asset). Doesn't mean you need to move the account!
>>
> 
> 
>> I *think* I understand the basics of accounting and double entry
>> bookkeeping. I read most of the documentation a few months ago, when I
>> started using Gnucash. It's just that a negative asset or negative
>> liability seems odd, that's all, it's nothing technical, I was trying
>> to find another way to deal with it that seemed more natural.
> 
> 
> 
>>> For your problem, decide what the NORMAL situation would be. Do you
>> expect
>>> this friend would be owing you more often than not, or would you be owing
>>> the friend more often than not. THAT is how you choose between Asset and
>>> Liability. If you can't predict or it really flips back and forth all the
>>> time, flip a coin.
>>
> 
> 
>> I just wish there was a category for "flips back and forth all the
>> time". Oh well, it's under Assets now.
> 
> 
> If you really want all your numbers to be positive, you can set up accounts
> under both Assets:FriendOwesMe and Liabilities:IOweFriend . When you borrow
> money from your friend, it will increase the liability account, and when
> your friend borrows money from you, it will increase the asset account. If
> both are positive and you want some asset to offset the liability (or vv.)
> you can create a transaction transferring from the asset to the liability.
> 
> The only problem with that scheme is that you have to check in two
> locations (and perhaps do some arithmetic) to see who really owes what to
> whom.
>