[GNC] liability or expense

[Baldero Mendoza]

Wow, what a great help group! Lots of great advice from many
knowledgeable people.

I settled on making an expense account out of google play
("Google_play_stuff") and matching it to a checking account, skipping
the credit card part since, with me, that is always transitory and
instantaneous anyway. (Hope that doesn't bite me down the road.)

Maybe it's unimportant but I do like not having those red negative
numbers on the accounts, even if everything does seem to balance.

Thanks everybody! Also, I hope I did the "cc" thing correctly.

On Mon, Aug 6, 2018 at 5:50 PM, Stephen M. Butler <kg7je at arrl.net> wrote:
> On 08/06/2018 02:27 PM, Adrien Monteleone wrote:
>> Certainly, if you have a card tied to the account and you are charged for each purchase on the spot, then no need for the mess I described.
>>
>> When you purchase:
>>
>> Dr. Expenses:Entertainment (software, whatever)
>> Cr. Credit Card (the one that will be charged)
>>
>> Use ‘Google Play’ as the Description for the transaction and the actual title purchased as either the Note or the Memo on the expense split.
>>
>> When entering expenses, I generally use the Description field for the ‘Vendor’ being paid. (who I purchased from)
>>
>> Otherwise, when you pay the credit card bill, that’s like any other situation, as Google Play is no longer part of the equation as Stephen noted.
>>
>> Regards,
>> Adrien
>
> That's the "fun" side of accounting.  So many ways to do the same
> thing.  Only your CPA knows for sure how you should do it -- and that's
> because it will be how s/he wants it done.
>
>>
>>> On Aug 6, 2018, at 4:20 PM, Stephen M. Butler <kg7je at arrl.net> wrote:
>>>
>>> On 08/06/2018 01:59 PM, Baldero Mendoza 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 have accounts open for things like "electricity" and that seems to
>>>> work just fine, but "google play" looks like it works sort of like a
>>>> credit card, so I listed it under  "liabilities", and that seems to
>>>> work too. I made the connected account "checking" and it all seems to
>>>> balance and work.
>>>>
>>>> However, what bothers me is that the "google play" entry under
>>>> "liabilities" is listed as a red negative number. So I have two red
>>>> negative numbers listed now, one under "liabilities" and one under
>>>> "google play". Everything balances, so is it okay or should I place
>>>> "google play" purchases as "expenses"? (I just started gnucash so
>>>> there aren't any credit card or debit card purchases yet.) The
>>>> "expenses" stuff gets listed as black positive numbers even though
>>>> they're an outflow of money just like the "google play" stuff under
>>>> "liabilities". Maybe it's optional and can be done either way?
>>>> Confusing.
>>>>
>>>> Thank you everybody!
>>>> _______________________________________________
>>> All  of us were brand new at one point.  I'm not much past that stage
>>> either.
>>>
>>> I'm not a CPA nor a book-keeper (though am married to an accountant and
>>> have written accounting software), so this is just my opinion.
>>>
>>> 1.  I would make an expense category for "Software" rather than tying it
>>> to "Google Play" -- but that's just my approach.  Would make it an
>>> expense though.
>>>
>>> 2.  The Google Play items (at least some of mine) get charged off to
>>> your credit card.  That would be a Liability account (short-term).
>>>
>>> 3.  So, the two sides for the transaction (purchase) would be the
>>> expense (Software or Google Play) and CreditCardClearingAccount (Liability).
>>>
>>> 4.  When you pay off the credit card, the transaction would be the
>>> CreditCardClearingAccount (to reduce toward zero) and the Checking
>>> Account (Asset) from which the payment was made.
>>>
>>> Hope this helps clarify your thinking.
>>> --
>>> Stephen M Butler, PMP, PSM
>>> Stephen.M.Butler51 at gmail.com
>>> kg7je at arrl.net
>>> 253-350-0166
>>> -------------------------------------------
>>> GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8
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