[GNC] liability or expense

[Kevin Reid]

On Mon, Aug 6, 2018 at 2:00 PM Baldero Mendoza <bzy711 at gmail.com> wrote:

> Please be patient with me - brand new to this.
>
> Household financial stuff. I want to post a "google play" purchase.
> Should I post as an expense or a liability?
>

I'm familiar enough with Google Play so I figured I'd describe how I handle
it. Google Play shows up two different ways in my accounting.

First, it is a store at which you can buy things. Therefore, if you buy a
thing you should have an expense account for it — and you can have as many
different ones as you feel like grouping your expenses in. Some of mine are
like:
    Expenses:Entertainment:Movies & Music
    Expenses:Computer Software
If you like you could have a 'Expenses:Google Play' account instead, but I
like to group by what things are and not who I bought them from, for the
most part.

You can pay for things with either a credit card directly or with your
"Google Play balance". So, Google Play is a place where you can pre-pay and
have a *positive* (to you) balance. This means it is an *asset* (not a
liability). For myself, because I have several things that act like this, I
have a category for assets that are a dollar amount that can only be spent
on some things (pre-paid balances, store credit), called "Restricted", so I
have the account
    Assets:Restricted:Google Play

So let's say someone gives me a Google Play gift card. I enter that as a
transaction going from Income:Gifts to Assets:Restricted:Google Play.

Then I decide to buy an app for my phone on Google Play. That's a
transaction going from Assets:Restricted:Google Play to Expenses:Computer
Software.

If instead my Google Play balance is zero when I buy something, that's a
transaction going from Liabilities:Credit Card to Expenses:Computer
Software. If it's not enough to cover the transaction, I haven't actually
found out what happens but I would assume you pay using two methods, so
that's just a split transaction.