[GNC] I need basic help

[Michael or Penny Novack]

Back when I paid it, I just made a payment out of my bank 
checking account straight to the CC company. Now, how do I assign that 
transaction? It’s not a CC expense but it is an expense of some 
kind—just from a different place. My CC statement will go into my 
Liability Account, right? So does my payment to the CC company come out 
of Assets and into Liability? And, if so, how do I assign it on the CC 
Account transaction line?
> Thanks All,
> Edwin

No, it is NOT an expense of any kind.  The expenses were when you used 
your credit card to buy things or pay for services. Forget that nothing 
left your pocket. You incurred a debt at THOSE moments. Not when you get 
around to making a payment on your credit card bill.

When you do make a payment, you debit the CC balance by that amount and 
credit the bank account the check was written against. It's not an 
expense, even though money left your bank account but a transfer 
(reduced your debt). In other words, the transaction had no effect on 
your net worth*..

Michael D Novack

* This is another case where "history" might (or might not) make it 
clearer. If we go back many centuries, there were no accounts of type 
income of expense. The transactions (representing income of expense) 
were immediately written against equity. In other words, they 
immediately affected equity wile a transaction paying against a debt 
would not affect equity.

    But it was hard to report on total income or expenses for a time 
period, had to search for those transactions. Many hundreds of years ago 
somebody got the clever idea of having TEMPORARY accounts of type 
"income" and "expense" --- they are fundamental type equity but until 
closed into equity provided information about income and expense since 
the last time they were closed. That closing process produced things 
like the P&L report.

    With software like gnucash, most of us never close the books as 
gnucash can produce the reports "pretend we did" (as if closed at the 
start of the time period and closed again at the end)


Michael D Novack