On 1/22/2022 9:05 AM, David Carlson wrote:
Heidi,
One day last month you went to the grocery store and bought $200.00 worth
of groceries, paying for them with your credit card. Another day you went
to the furniture store and bought two chairs, paying with your credit
card. Those two separate transactions would be recorded between your
credit card liability account and your grocery expense account and your
furniture expense account in transactions dated on the days that you made
those purchases. Then at the end of the month you paid your credit card
bill from your bank account. That was a different transaction, but it was
simply a payment to the credit card company.
Just keep each transaction separate in Gnucash, like you did in real life.
Then those other suggestions will make more sense.
This is correct. When you bought the X that was one transaction, in
which you paid for X by assuming a liability on that date. When you
later pay some (or all) of your credit card liability that is simply a
reduction of current assets and a reduction of the liability (they are
on opposite sides) on some different date.
The only reason I am posting this "addition" to the correct answers you
have already received is that it works the other way around too.
When you receive a check for Y you enter that transaction THEN (as of
that date), perhaps against an account named "undeposited checks". When
you later get around to depositing checks for Y and Z, etc. that is
again a simple transaction (not a split) debiting "bank account" and
crediting "undpeosited". The money is yours when you get the check, not
only later when you get around to depositing it.
If what we are telling you seems strange, stop for a moment and think
about how a credit card works. Suppose you didn't pay the balance off,
only the minimum due. The way you were trying to do it, it might be LONG
time before you saw the expense for "food" (what you charged THIS month
at the grocery store). That would be clearly wrong. Might I suggest that
you are perhaps looking for OTHER (different) information, what is known
as "cash flow". Don't worry, even though you keep your books correctly
(the way we are telling you to enter these transactions) gnucash can
produce a report on that too. What is important is to realize that these
are different. You can be in a good financial condition for the long
term (income > expenses) but in trouble with "cash flow" in the short
term or vice versa (you have cash in hand to pay bills as they come due
but because income < expenses your liabilities keep growing).
Michael D Novack
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