Thanks Elvis.
Because of the casual way the insurance company handles this highly
specialized business, only had 5 transactions to post for the entire
year. While report monthly I often don't get bills for 2 or 3 months.
I ended up doing the Pre-Paid thing for the initial payment, then
charging Insurance against that credit each month after I submit my
report until it was exhausted. Subsequent payments were expensed
directly against Insurance.
It took me just few minutes to that this afternoon and I now have much
better sense of what my obligation is to them.
I care even if they don't. ;-))
Best,
Tom
------ Original Message ------
From: "elvis" <el...@dogonfire.com>
To: gnucash-user@gnucash.org
Sent: 12/15/2018 5:50:49 PM
Subject: Re: [GNC] How To Handle Prepayments
Unless you really need to do accrual accounting, then don't. If you are never
getting it back, it is not much of an asset.
Put it though as Insurance Expense, Initial Payment, Payment 2 etc.
Accounting is there to help you, not make more work to make it "correct".
On 16/12/18 7:06 am, tbalaban wrote:
My Company pays an initial payment to our insurer at the beginning of each
policy year. As we incur insurance costs based on event participants, that
initial payment is charged. After it is exhausted we get a monthly bill for
the amount due. In no case do we ever get the initial payment back.
I'd like to treat the initial payment as a credit to insurer's A/P account
then each month create a bill for the amount payable.
Is this the correct way to handle such a transaction?
Assuming it is, how do I credit the amount due from whatever account I
posted the initial payment to?
In practice we pay the initial payment in February, the start of our paolicy
year. Usually, in April or May, the initial payment is exhaused and we have
to send more money to pay that month's bill. I'm not at all clear on how to
post this situation.
I'd appreciate knowing how to do this in GNUCash as well as any comments on
the applicable general accounting rules. In Quickbooks I could debit or
credit A/R or A/P diectly and selects the customer or vendor required. Since
that capabiity does not appear to be available in GNUCash, how do I post it?
Many thanks for your already generous help.
--
Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html
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