[GNC] Credit Card Format Good?

[David Cousens]

To treat a credit card properly you will need to setup accounts .GnuCash has
basic account types (Assets, Liabilities, Equity and Income and Expenses and
the top level accounts in your Chart of accounts will normally have these
names.

Your credit card account is a liability and will appear as a subaccount of
the Liability top level account. You may have other liabilities e,g, a loan
as wellDepending on the complexity of your financial affairs you may create
intermediate accounts but ignore that for the present. Sub accounts are
usually represented with a colon as a separator hence a credit card account.

Liability:CreditCard

Similarly each of the other top level accounts will have sub-accounts
representing expenditure and income you want to track and assets you may own
or control ( bank accounts proerty etc).

When you charge something to your credit card the entry ( ignoring date and
description coumns) will look like (use the EDit ->Preferences_>Register
Defaults->Auto-split Ledger set to view the transactions in a form similar
to the presentation below and click on the transaction to view its splits.
If this doesnt make sense read the Tutorial and Concepts Guide
(https://www.gnucash.org/docs/v3/C/gnucash-guide/index.html) and the help
manual https://www.gnucash.org/docs/v3/C/gnucash-help/help.html). The
entries below are as they would appear when viewed from the register for
your Credit Card account.  The same transaction could also be viewed from
the register for the Expense account (column names might be different) for
the purchase transaction .

                                          Tot Payments      Total Charges
Liability:Credit Card                                           $5
Expenses:Groceries                   $5


When you make a payment the money comes from your bank account e.g. Checking
account
and is used to reduce the liability

                                          Tot Payments      Total Charges
Liability:Credit Card                   $xxx
Asset:Checking Account                                        $xxx

This transaction could also be viewed for the register for your Checking
Accoun.It will be basically the same but the column header for payments and
charges may be different in this register.

You would not normally have an expense account for your credit card account,
it is a liability not an expense. Your expense accounts are the things you
commonly spend money on not the source of the funds used to buy them. You
are close but not quite there. If you haven't read the guide section called
the Basics it might help.

David Cousens



-----
David Cousens
--
Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html