[GNC] liability or expense

[Stephen M. Butler]

On 08/06/2018 11:15 PM, Baldero Mendoza wrote:
> 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.

And another way to treat Google Play -- like a debit card that directly
hits the checking!

> 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
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