[GNC] How to make liability payment to be appeared in expenses reports
David Cousens
davidcousens at bigpond.com
Sat Jun 29 05:20:35 EDT 2019
When you receive the payment from the customer it is income not an expense or
liability but when you receive it, you also create a liability that you will
have to pay to the insurance company at some future time. You would record
this with a transaction with four splits as follows:
Asset:Current Assets:Checking Db xxxx
Income Cr xxxx
Expense:Insurance Db xxxx
Liability:Insurance Cr xxxx
The first 2 lines record you receiving the money from the client. The second
2 lines records the expense when it is incurred, i.e. when you offer the
client insurance coverage and the creation of the liability to pay the
insurance company.
Then when you pay the insurance company, you reduce the liability:
Liability:Insurance Db xxxx
Asset:Current Assets:Checking Cr xxxx
David Cousens
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David Cousens
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