On Sun, 11 Dec 2022 at 01:28, David Cousens <davidcousen...@gmail.com> wrote:
> > Dave, > > The different approaches with this mainly reflect different circumstances. Yes, I can see that. > > PayPal to some extent acts a bit like a bank so my first thought would be > to > treat them the same as you would treat a bank account, but the appropriate > way > to treat it depends on how you actually use your account with them. > > If you maintain a positive balance in the Paypal account from which > payments are > made to vendors then it is reasonable to treat a PayPal account as an asset > account of type bank as they are not extending credit to you. I do not have any credit facilities with PayPal. I have in the past withdrawn funds immediately. However, I am likely to stop this and maintain positive balances for USD and Euro because I make the occasional sales in USD and Euros, and frequently buy in those currencies. Keeping positive balances will reduce currency conversion fees. So I would definitely consider PayPal an asset, not a liability. If they extend credit to you, i.e. they pay the vendors immediately and > then you > pay out the balance owing to them at the end of the month, i.e. the account > balance is negative the majority of the time, then they are functioning > more as > a credit provider and a Liability account is a more appropriate way to > treat the > account. That’s not the case with me. You wouldn't necessarily need to raise an invoice to cover a payment to > PayPal > just as you wouldn't when you pay off your credit card with a bank. Okay, so if I think the following is a reasonable way to transfer money from the bank account to pay for goods with PayPal, with PayPal configured as an asset 1) Open bank account in GnuCash 2) Perform a transfer between the two assets Debit account: Assets -> PayPal > GBP Credit account: Assets -> Bank account > > The main purpose of Customers and Vendors and the business features around > them > is to avoid having to maintain individual accounts receivable and accounts > payable accounts for each customer or vendor you interact with and to > provide > the information to manage the credit that is extended to you by vendors > and the > credit you extend to your customers and the effect it has on cash flow. We are required here to keep records of “who you bought and sold to (unless you run a retail business)” https://www.gov.uk/running-a-limited-company/company-and-accounting-records I believe that my accountant told me that should be name and address. For me at least, having everyone as a vendor or customer makes some sense and consistently, but I think a transfer between the two assets makes more sense for transfers between PayPal and the bank account. Hope this clarifies things a bit. Yes, it is becoming clearer. > David Dave -- Dr. David Kirkby, Kirkby Microwave Ltd, drkir...@kirkbymicrowave.co.uk https://www.kirkbymicrowave.co.uk/ Telephone 01621-680100./ +44 1621 680100 Registered in England & Wales, company number 08914892. Registered office: Stokes Hall Lodge, Burnham Rd, Althorne, Chelmsford, Essex, CM3 6DT, United Kingdom _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
