Unable to see Prepaid Insurance in Balance Sheet

[Adrien Monteleone]

Aureliu,

After running the Balance Sheet report, click the Options button and then the Accounts tab. Make sure the accounts you want to include in the report are highlighted. You may need to play with the “Levels of Subaccounts” setting to be able to include nested accounts below the default of “3.”

This should get your Prepaid Insurance account to display its value on the Balance Sheet. However, I would raise that account to be a sub-account of Current Assets, not the Restricted Bank account. (or even a sub of a more general Pre-Paid Expenses account which is a sub of Current Assets) As a sub of the bank account, you are saying that money is still in the bank account. It is not. You paid it out and are now paying it back.

I would enter the December pre-payment as follows (say 1200 is the annual premium):

Dr.	Assets:Current Assets:Pre-Paid Expenses:Pre-Paid Insurance	1200.00
	Cr.	Assets:Current Assets:Restricted Account		1200.00

Then set up an automatic transaction each month to “use” 1/12th of the pre-paid asset

Dr.	Expenses:Insurance:whatever-type-of-insurance-this-is			100.00
	Cr.	Assets:Current Assets:Pre-Paid Expenses:Pre-Paid Insurance	100.00

Set that automatic transaction to occur on the same day every month. It should match the day of the month in December that the policy started. (or the day before, as that was when the previous policy ended)

When you make actual payments into the Restricted Account to refund it for next year, enter those as 1/10th of the total like so:

Dr.	Assets:Current Assets:Restricted Account		120.00
	Cr. 	Assets:Current Assets:Operating Account		120.00

Generally Pre-Paid Expenses are their own category under Current Assets, and it is likely you may end up with more than one pre-paid expense asset at any given time. Putting them all together shows them as a category rather than being included under various bank accounts. (which they technically are not a part of)

There are many excellent and free resources for accounting online. One I use frequently when my college accounting text book isn’t handy was this one (It’s just an online textbook): http://www.principlesofaccounting.com/ It is quite thorough and should cover most situations.

Regards,
Adrien

> ------------------------------
> 
> Message: 14
> Date: Wed, 5 Apr 2017 14:03:01 +0000 (UTC)
> From: "Aureliu Porumbescu. Ph.D." <mangesius at yahoo.com>
> To: "gnucash-user at gnucash.org" <gnucash-user at gnucash.org>
> Subject: Unable to see Prepaid Insurance in Balance Sheet
> Message-ID: <1231213456.11590279.1491400981599 at mail.yahoo.com>
> Content-Type: text/plain; charset=UTF-8
> 
> Hi, I have a special situation where we pay a large insurance premium in December each year for the next year. We pay it from a Restricted, (Reserves), bank account, and then repay the amount in ten installments from the Operating, (Cash), bank account. My problem is probably in the way I, (no accounting background), have set up the accounts: the Prepaid Insurance, (Current Asset), is now a subsidiary of the Restricted Bank account. The money flows right and the P&L reflects it. However, the Balance Sheet apparently cannot show it. Is there a way to set up the chart of accounts or add something, (other account names, journal entries, whatever) to fix this problem? Many Thanks.