[GNC] How to record it into gnucash ?

[Joshua Chambers]

I'd like to share with you all how I do this.  I have an account called
"Exchanges", with sub-accounts representing different people or groups
(Exchanges:Bob, etc).

When I loan someone money, I enter this as a credit to this account, so
it's black if they owe me, and enter it as a debit when they loan me
something, so it's red if I owe out.  This way I can see at a glace how
much is owed to me or owed out in total.

On 4/27/20 10:22 AM, Adrien Monteleone wrote:
> Long,
>
> Along with what Michael advised, you can do this with one extra account, or two. The choice is yours. I’m going to use very general account names, but you could use ‘Owed to me’ or ‘Given to me’ if you like
>
> Two accounts model:
> ===================
>
> Assets:Remibursements:Bob
> Liabilities:Deposits:Bob
>
> If you pay a bill for ‘Bob' before he gives you money then:
>
> Dr. Assets:Remibursements:Bob
>   Cr. Assets:Cash
>
> When Bob pays you back:
>
> Dr. Assets:Cash
>   Cr. Assets:Remibursements:Bob
>
>
>
> If ‘Bob' gives you money in advance (your second scenario):
>
> Dr. Assets:Cash
>   Cr. Liabilities:Deposits:Bob
>
> When you pay the bill for Bob:
>
> Dr. Liabilities:Deposits:Bob
>   Cr. Assets:Cash
>
>
> *The benefit to using two extra accounts is that you record each event as it really was. In the first scenario, you are owed money (an asset) and in the second, you owe someone else (a liability). But the drawback is that you can’t readily see the net of the reimbursements or deposits at a glance for a single individual. (even if you use individual sub accounts like ‘Bob’) Therefore, I’d recommend just using one extra account.
>
> One account model:
> ==================
>
> The first scenario is the same, you pay the bill first, Bob pays you back later. You use the ‘Assets:Reimbursements:Bob’ account.
>
> The second scenario will also use this account but with the debits and credits to the same account like so:
>
>
> If Bob gives you money in advance (your second scenario):
>
> Dr. Assets:Cash
>   Cr. Assets:Reimbursements:Bob
>
> When you pay the bill for Bob:
>
> Dr. Assets:Reimbursements:Bob
>   Cr. Assets:Cash
>
>
> Now, everything is done in one account. If the value of the account is positive, Bob owes you. (an asset) If the value is negative, you owe Bob. (a contra-asset)
>
> You might repay Bob by paying his bill as agreed, or by returning his cash.
>
> Note, if Bob normally always pays in advance, you could still use a single account but make it the Liability:Deposits variety instead of Assets:Reimbursements. Which one is a personal choice, but I’d only use one or the other for sanity as I noted above.
>
> ------
>
> Also, you *could* use the business features for this but that is going to be more work than necessary. For occasional transactions, I’d stick with manual entries. I use the ‘One Account’ method for various shared expenses with friends and family regularly. I have an asset account for each friend or family member so I can see at a glance if I owe them (negative) or they owe me (positive).
>
> Regards,
> Adrien
>
>
>> On Apr 27, 2020 w18d118, at 10:14 AM, Michael or Penny Novack <stepbystepfarm at comcast.net> wrote:
>>
>> On 4/27/2020 6:59 AM, Long wrote:
>>> Hello,
>>>
>>> I'm not an accounting, so that why i need your help.
>>>
>>> I assumed that my friend want to pay internet bill, but he forgot his money.
>>> So i will pay it for him and take my money back later. How can i record it
>>> into gnucash ?
>>>
>>> I am doing by this way :
>>> Transfer money from "Assets:Cash" to "Assets:Owed to me", when he pay to me,
>>> i will transfer money from "Assets:owed to me" to "Assets:Cash" . Right ?
>>> -------------------------------------------------------------------------------
>>> And other assumed :
>>>
>>> I assumed that my friend want to pay internet bill, but he ask me to pay for
>>> him (because he busy to go somewhere). He gave me some money to pay internet
>>> bill.How can i record it into gnucash ?
>>> I am doing by this way :
>>> Transfer money from "Equity" to "Assets:Cash", when i pay internet bill, i
>>> transfer money from "Assets:Cash" to "Equity". (Because i do not pay
>>> internet bill, it's him). so i won't record it into "Expense" account. Right
>>> ?
>> In the first case, you are exactly correct.
>>
>> In the second, it would be the reverse. But that's not what you said. You would debit cash and credit a LIABILITY for this money you owe your friend, and then when you pay his bill, debit the liability and credit cash.
>>
>> Michael D Novack
>
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