[GNC] Question about transfers
john
jralls at ceridwen.us
Fri Apr 22 23:35:48 EDT 2022
Quicken isn't really an accounting app. Intuit's offering in that space is Quickbooks. That means that how you used Quicken isn't directly transferable to GnuCash. If being able to use a Free Software alternative to Quicken the same way you use Quicken is important to you then have a look at KMyMoney: https://kmymoney.org/ <https://kmymoney.org/>
To accomplish what I think you're trying to do in "real" accounting requires two special accounts: An asset account to collect the money reserved for the payment and a liability account to accumulate the accrual. For your property tax example, suppose you owe 1200 every six month, but you want to record the expense and make a reservation monthly. You'll create two accounts: Assets:Current Assets:Provision for Property Tax and Liabliltues:Current Liabilities:Accrued Property Tax. Every month you'll create a transaction that looks something like:
5/1/2022 Accrued Property Tax
Assets:Current Assets:Bank 200.00
Assets:Current Assets:Provision for Property Tax 200.00
Expenses:Tax Expenses:Property Tax 200.00
Liabilities:Current Liabilities:Accrued Property Tax 200.00
Then when you transfer the money to the Tax Collector:
6/1/2022 Pay Property Tax
Assets:Current Assets:Provision for Property Tax 200.00
Liabilities:Current Liabilities:Accrued Property Tax 200.00
Regards,
John Ralls
> On Apr 22, 2022, at 3:24 PM, Brad <gbewing3-gnu at bewing3.com> wrote:
>
> Thank you for the quick response. I do have some background in
> accounting and I have actually reviewed both the Tutorial and the full
> Help manual. So far I am liking QnuCash alot. It's just a matter of
> getting it to do some of the things I was doing in Quicken.
>
> So, you are pretty close to understanding what I am trying to do.
> Yes, I am accumulating funds in a separate bank account for a large
> purchase (let's say property taxes paid once a year). Then when it is
> time to pay the property tax I need to transfer the funds to my
> checking account so that I can write the check to the county. At the
> same time I want to keep track of how much I have transferred for that
> purpose. For example, maybe I transfer the funds in two transactions
> and I want a quick way to see if I have transferred enough.
>
> In Quicken, my property tax budget was set to zero. When I write the
> check for the property taxes, say for $1,000, that expense category
> goes to -$1,000. Then when I transfer the funds, I can add them to
> that budget line, bringing the property tax expense category back to
> zero. This way I have basically 3 entries, but I need an even number
> of entries to follow double-entry accounting rules. Two entries to
> transfer the funds from one account to another, and then one to show
> the funds going to the property tax expense. Oh, and I guess two more
> when I write the check to the county.
> Thanks.
> Brad
>
>
> On Fri, Apr 22, 2022 at 3:54 PM Stan Brown <the_stan_brown at fastmail.fm> wrote:
>>
>>
>> On 2022-04-22 14:37, Brad wrote:
>>> My question is regarding transfer of funds from one account to
>>> another. I want to transfer funds from one account to another, but I
>>> also want to track the transfer amount against an expense account so I
>>> can keep track separately of how much I have transferred for different
>>> reasons.
>>
>> Welcome to GnuCash, Brad! There's a bit of a learning curve coming from
>> Quicken or most other software, because in GnuCash you're doing
>> double-entry bookkeeping, and most of the details are visible to you.
>> Have you looked at the Tutorial and Concepts Guide (in the Help menu)
>> yet, to help you with that learning curve?
>>
>>
>> By "transfer funds from one account to another", do you mean transfer
>> from one bank account (or cash, money market, etc) to another? Is this a
>> matter of segregating funds that you expect to spend for a large future
>> expense, such as a vacation or a new furnace? I'm going to assume both
>> of those are yes, but if I've guessed wrong please follow up with more
>> details and perhaps an example of what you're trying to do.
>>
>>
>>
>> By the way, this isn't really a GnuCash problem, but an accounting
>> problem. Your chart of accounts should be structured to let you
>> aggregate information in the ways that you want. It would be no
>> different if you were keeping our books in a big ledger with pen and ink.
>>
>>
>>
>> If you have some sort of bank account in which you're accumulating funds
>> against a large future expense, you'd probably want to name that account
>> in GnuCash as "Assets:Banks:Savings for Vacation" or similar. when you
>> transfer money from your regular everyday bank account, your transaction
>> would look like this:
>>
>> Debit: Assets:Banks:Savings for Vacation
>>
>> Credit:Assets:Banks:Regular Checking
>>
>>
>>
>> As for tracking against expenses, no expense is created by this account
>> transfer. Why? Because even though you may presently intend to use these
>> funds for a particular future expense, you haven't actually spent them
>> yet, and you could change your mind before you do.
>>
>> When you start spending out of the vacation account, _that's_ when you
>> have an expense, and your transactions would look like this:
>>
>> Debit: Expenses:Vacations
>>
>> Credit:Assets:Banks:Savings for Vacation
>>
>>
>>
>> --
>>
>> Stan Brown
>>
>> Tehachapi, CA, USA
>>
>> https://BrownMath.com
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