[GNC] help setting accounts to track contributions

[Rick Copple]

On 05/04/2018 08:24 AM, Matthew Pounsett wrote:
> This doesn't sound straightforward at all.  What's complicated about
> treating joint contributions to the household coffers as "income" to the
> household?  Treating that income as ever-increasing equity would confuse
> P&L and cashflow calculations, wouldn't it?


I believe what he is talking about as straightforward is fewer entries. 
IOW, instead of showing an entry from equity to income, you are showing 
an entry from equity straight to expenses. That eliminates an entry that 
would otherwise be made. One's P&L would look a little funky (only 
showing expenses), but this isn't a business as such that has income 
other than from the "partners". So actually, it would be more accurate. 
For instance, think of it as what an accountant I used to work for did. 
For personal expenses that were drawn on the company, she had a separate 
set of "books" in equity under draws for their varied personal expenses. 
Reverse that, and you have money being contributed by a partner going to 
pay bills. Same thing. So it makes sense from that perspective.

The only advantage I can see to entering from equity to income, and then 
paying the bills is that you can get the whole thing on one report which 
would make it clear who is paying what, but only for a specific period 
of time. That said, it would be just as easy to look in equity and see 
who is behind and who is ahead to decide who pays the next bill. That 
has the advantage of not having to worry about running a P&L for that 
purpose at all, other than to see what your expenses were for a specific 
period of time, or being force to run a P&L for the time of the whole 
file to see that information. Easier to look at the chart of accounts to 
see the whole picture of who is ahead or not.

For instance, let's say you had to pay a bill for electricity of 
$200.00. It would be one simple entry to record it:

Equity:Owners Investment:P1  CR: 200.00
Electricity DB 200.00

OR

Equity:Owners Investments:P1 CR 100.00
Equity:Owners Investments:P2 CR 100.00
Expense:Electricity DB 200.00

Your done. To record it the other way would mean:

Bank Account: DB 200.00
Income:P1 CR 200.00

OR

Bank Account: DB 200.00
Income:P1 CR 100.00
Income:P2 CR 100.00

And then:

Bank Account: CR 200.00
Expense:Electricity: DB 200.00

You'll get a nicer P&L, but I don't know how valuable that is in this 
situation. It sounds to me like they mainly want to record expenses and 
have an easy way to make sure they are paying an equal share. Either 
method would accomplish that, but the former method has less data entry 
to accomplish that. We'll leave it up to them which route they want to take.


-- 
Rick Copple
Window Cleaning Specialist
<http://www.copplecleaningservice.com>