Pay with Credit Card, split bill from cash with friend, how to reconcile budget?

Mike or Penny Novack mpnovack at mtdata.com
Fri Feb 19 09:26:30 EST 2016


Bill, I am going to put my response first so I can leave what you wrote 
intact but we can temporarily avoid being distracted by the details.

Gnucash can be used for various accounting purposes, among these, 
keeping a set of books (recording actual financial transactions) and 
preparing a budget (a plan for financial transactions) and as other 
discussions recently taking place, there are ways of trying to enforce 
sticking to a budget (enforce the plan being followed).

You have to keep these different uses in mind.

JUST recording the (actual) transactions related to this meal out and 
repayment by your friends has nothing to do with the fact that you had 
$200 allocated in the budget. The loans to your friends and their 
subsequent paying the amounts back were transfers between asset classes, 
not really related to WHAT they used the money for (a meal).

Understand? You spent $20 of your dining out budget. The other $40 on 
your credit card was NOT for dining out in spite of the fact that the 
credit card vendor was the restaurant. It was for loans to friends.

That assumes that you did get paid back. If not ..... well then that 
other $40 becomes an expense and you will need to figure out how to 
adjust your budget. You perhaps did not make a provision in your budget 
for "bad loans to friends". Well in that case you decide what 
modification to make in your budget, and that decisions COULD be "take 
it out of dining out" --- but could also be a little bit from here, a 
little from there, etc.

Michael




On 2/18/2016 2:00 PM, Bill Chambers wrote:
> Hey all,
>
> Just started using gnucash a month ago and I love it. I'm tracking down to
> the cash in my wallet and loving how easy it is to do!
>
> I'm having a bit of a challenge, here's the scenario (made up but an
> accurate reflect):
>
> I have a budget of $200 for going to to eat. I go out to dinner with some 2
> friends and we spend $60.
> I pick up the tab to make it simple and put it on one credit card while my
> friend hands me $20 on the spot and the other one sends me $20 on Venmo.
>
> I log those transactions in new cash. I register the $40 "income > payback
> from friend" and those amounts go into "cash on hand" and Venmo
> respectively. I log the $60 credit card transaction as "expense > food and
> dining".
>
> Here's my question, since I have a budget of $200, that credit card will
> show up as $60 meaning that I've already spent more than 25% of my monthly
> budget even though I actually haven't. I don't really get a rebate on the
> credit card transaction because I still have to pay the same amount to the
> credit card company, so it doesn't quite make sense to be to log it as
> such. I've tried a couple of different things and am now just thinking
> about trying to reconcile it at the end of the month some how but I also
> figure that this is a bit of a solved problem.
>
> How can I formulate these transactions to handle this kind of situation?
>
> Thank you so much,
> Bill
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-- 
There is no possibility of social justice on a dead planet except the equality of the grave.



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