[GNC] Start up cost in GnuCash

[David Cousens]

Taneisha and Joel,

One way to track this would be to setup a dummy bank account for your personal
bank account for the business  and a dummy liability account for your personal
credit card  within your Gnucash accounts for the business. Keep these separate
from the GnuCash account corresponding to your actual business bank account and
credit card when you do set these up.

When you make a purchase for your business on your personal credit card  for $x,
you make a four split transaction as follows:

Asset:Bank Personal              Db  $x
Equity:Owner's Contribution's    Cr $x
Liability: Credit Card Personal  Cr $x
Expense:as appropriate           Db $x

When you pay your credit card from your personal Bank account if $y is the total
of all purchases for the business

Asset: Bank Personal             Cr $y
liability:Credit Card Personal   Db $y

The total  $y should be equal to the sum of all the $x amounts you made on
individual purchases so that at the end of a period when you have paid off the
credit card the net balance in Asset:Bank Personal goes to 0 and your purchases
have been recorded as contributions to equity of the business.

If the purchase was a capital purchase for the business then instead of an
expense account you would debit an asset account corresponding to the capital
item.

I recorded my personal contributions to my business this way when starting a
business many years ago and my accountant was quite happy but that isn't
necessarily a recommendation, as he was the reason I ended up doing a master's
degree in accounting.

When you have your business accounts setu,p you create new asset and liability
accounts for them. At that point you can hide (not delete) the dummy accounts
for your personal bank account and credit card.

David Cousens

On Tue, 2023-01-24 at 19:18 +0000, Joel via gnucash-user wrote:
> Hello Gnucash, We are trying to figure out how to enter into gnucash the
> initial expenses or startup cost for the business we have been putting on our
> personal credit card to start this new business.
> Thank you in advance for your help.
> Taneshia and Joel
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