[GNC] Double entry bookkeeping for purchases to be paid at later date

[Stan Brown]

On 2021-11-07 07:11, Sharon Sydnor wrote:
> I am only experienced in basic bookkeeping but irrespective of what type of payment you intend to make, you have bought something you intend to pay for later hence IT IS a LIABILITY -so your second account WILL NOT  be a checking/payment account. 

I would agree if the purchase was put on account ("charged"). But when I
write a check, I have paid for the purchase. That the check is postdated
is immaterial: legally I am obliged to have funds in my account and
maintain them there till the check is paid.

When I write a check for a future date, or schedule a bill payment on my
bank's website for a future date, I book the debit to whatever account
and the credit to the bank account right away, dated with the current
date. Include the expected payment date in the Description field, e.g.
"State Farm Auto pays 11 Dec".

Some people choose to record the transaction right away, but as a future
transaction. I do it the way I do so that my account balance on my books
is decreased immediately, and therefore I never run the risk of being
accidentally overdrawn.


-- 

Stan Brown

Tehachapi, CA, USA

https://BrownMath.com

https://OakRoadSystems.com