Unable to create liability account under expense account

[Suresh Saragadam]

Hi Buddha,

Thanks for the reply,Now I understood may be it is not a general accounting
practice.
To my requirement i am not required to record double entry,
I know that i am spending from my pocket there is no need for income or
profit and loss statement,
I just want to track my Expenses. and accounts Payable.

To my requirements, Instead of general accounting practice can i create a
liability type account under an expense type parent account at-least in
single entry accounting practice
If i required to do so can i change any global settings to do so in GNU
Cash.

Regards.


On Fri, Nov 24, 2017 at 1:33 AM, Buddha Buck <blaisepascal at gmail.com> wrote:

> You should talk to your accountant about how to set up your accounts to
> handle this type of transaction. Your proposed solution (a liability
> account under the concrete expense account) is not how I would do it, and I
> believe is generally not considered the proper method of doing it. Things
> may be different according to the common accounting practices of your
> jurisdiction, which is why you should talk to your accountant, and not to
> us, about how to do it.
>
> Expense and liability accounts are very different things. They do not show
> up together on the same reports, they measure different things (expenses
> measure what money is spent on, liabilities measure money is borrowed from
> other people), and they have different balances (expenses have debit
> balances, liabilities have credit balances). They can't generally be mixed
> or added together.
>
> In general, in GnuCash and other accounting packages I've worked with,
> sub-accounts must be the same general "type" (asset, liability, income,
> etc) as their parent account. The value/balance of the parent account
> includes the balance of the child accounts. When you see an account name in
> GnuCash like "Expenses:Non-Taxable:Charity:Church" That implies that
> there are total expenses, some of which are non-taxable, some of which are
> charities, some of which are to the church. The total non-taxable expenses
> includes those going to charities like your church, your local Makerspace,
> the local soup kitchen, as well as non-charitable non-taxable income like
> (in the US) mortgage interest or healthcare. Putting a liability account in
> such a roll-up would not make sense.
>
> For your situation, I would have an A/P liability account completely
> separate from the Material Expenses hierarchy, and when I received an
> invoice for cement, I would create a transaction that debited the cement
> expense account and credited the A/P liability account. Then, when I paid
> the bill, I would create a transaction that debited the A/P liability
> account and credited the associated cash/banking account.
>
> If you use the "Business Features" within GnuCash it will handle the
> details in the previous paragraph semi-automatically, including creating
> the A/P account.
>
>
> On Thu, Nov 23, 2017 at 2:30 PM Suresh Saragadam <
> saragadamsuresh at gmail.com> wrote:
>
>> I am working on a small construction work where i need to record my
>> expenses for both material and men (labour)
>>
>> Initially i need to create expense accounts for
>>
>> sand, stone,cement, under Total Material Expences
>>
>> Total Material Expences
>> |_sand
>> |_cement
>> |_stone
>>
>> i am purchasing cement on credit(Loan) that is accounts payable i.e.
>> liability
>>
>> Here i need to create liability account for cement under material
>> expenses,
>> but i am unable to create a liability account for cement under material
>> expense account
>>
>> so that i can record total material spend including liability for cement
>>
>> this is very minimum accounting requirement.
>>
>> Regards
>>
>> Suresh
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