[GNC] Credit Card Format Good?

[Adrien Monteleone]

In addition to the info David & Peter offered, I see an issue with the ‘Bills:Credit Card Charge’ account.

That shouldn’t be there.

Bills that you owe *are* your liabilities.

Normally, recurring bills like utilities, phone, tv, and rent would fall under ‘Accounts Payable’ which is a Liability account. Recurring bills don’t need individual accounts to track them. (you don’t need to use the business features to use this account, but never mix manual and business feature entries there, if you need to use the Business Features *and* make manual AP entries, create an ‘Other Accounts Payable’ account and do the manual stuff there)

Other liabilities like mortgages and auto loans would each have their own liability account, as would each credit card because they are longer term and in the case of cards, ongoing.

There is no need for a ‘Bills’ top level account.

When you purchase something using the card it would look like:

Dr. Expenses:(relevant expense account here) 	$5
	Cr. Liabilities:Credit Card			$5

Your column labels might be ‘Payments’ and ‘Charges’ if you aren’t using formal labels, otherwise, they will be ‘Debits’ and ‘Credits’

This will increase the amount of that expense account and increase the liability owed on the credit card.

When you make a payment on the card balance, say when you get your monthly statement, that would look like:

Dr. Liabilities:Credit Card			$100
	Cr. Assets:Checking				$100

This will decrease the liability owed on the credit card and decrease the amount in your checking account.

This is what you have for Entry 2

(I’m not sure what the example before entry 1 is, but if you follow the Help & Guide and the advice of David & Peter, you wouldn’t be using a credit card expense account anyway.)

Note, when you reconcile a credit card account, GnuCash will offer to enter an interest charge for you, as well as enter a payment transaction. (since many people pay on their account when they reconcile) You can use these helpful features, or do those manually as you prefer.

Regards,
Adrien



> On Sep 15, 2019 w38d258, at 8:03 PM, <ornd25 at tutanota.com> <ornd25 at tutanota.com> wrote:
> 
> I've just recently started with GnuCash and decided to treat credit cards as liabilities rather than expenses as I did previously. To that end I've migrated my accounts, but since I don't know how the result should appear I'd like to ask if I have it done properly.
> 
> Right now I've set it up simply, without tracking individual purchases, but if I've done it right, I can begin to track individual purchases next month.
> 
> Expense:Credit Card Charge Account
> Expense:Credit Card (Column "Tot Expense") $5
> Liabilities:Credit Card-L (Column "Tot Rebate") $5
> 
> Liabilities Account
> Entry 1
> Credit Card-L Account
> Bills:Credit Card Charge (Column "Payment") $5
> Liabilities:Credit Cards - L (Column "Charge") $5
> 
> Entry 2
> Credit Card-L Account
> Liabilities:Credit Cards - L (Column "Payment") $5
> Checking account   (Column "Charge") $5
> 
> Expenses no longer balance; Liabilities balance, but I suppose they would if I'd done it completely backwards. Is this done properly or backwards?