Dear John, Liability can be short-term or long-term (less than 1 year or more than 1 year). Liability arises when Goods are delivered or Services are done. Payment of Goods and Services is another question. It can be prepayment or payment after the job is completed. So when you receive Goods with Invoice, you enter Liability and then close it with payment. So many words, but it would be better to see some examples with debit and credit, please look it up on the internet.
The question you have asked is the same as the question of what is the difference between cash flow and income statement. Cash outflows are not equal to expenses and cash inflows are not equal to revenue. It's called accrual accounting. Liability is what you owe to somebody and expense is another side of that coin. Something can be Liability and now expense. For example, you bought materials and these are in your ware house, so you have liability (you owe money) but this isn't an expense since you didn't use these materials. Regards, уто, 18. феб 2025. у 06:57 John Walker via gnucash-user < gnucash-user@gnucash.org> је написао/ла: > In standard bookkeeping, a liability is anything that a business owes > for more than the accounting period which is usually 12 months. A > mortgage is a good example. An expense is something that is paid out > within the accounting period. The electricity bill is a good example. > > Cheers > John > > On 22/11/2024 11:09 pm, Ed Greenberg wrote: > > I do my credit cards the same way, but I don't do individual bills that > > way. For instance the water bill, gas bill, medical copayments, and any > one > > time spending, I just record it as a transaction between the bank and the > > expense. The liability accounts are very good for aggregating what's > going > > to be part of a payment, but they don't do much for you when there's only > > one charge against a payment. > > > > Ed > > > > On Fri, Nov 22, 2024, 07:05 Michael Hendry <hendry.mich...@gmail.com> > wrote: > > > >> > >>> On 21 Nov 2024, at 19:08, Griffin <grif...@bernevyl.com> wrote: > >>> > >>> I'm no accountant, so I'm wondering what the difference is between > >> liabilities and expenses, and the importance of that difference. > >> > >> Nor I, so my comments are not definitive. > >> > >>> I currently have GnuCash set up so that everything I spend is an > >> expense. Would it be "better" to have the recurring bills as > liabilities, > >> i.e. rent, utilities, etc. If that is the case, would I place a debt > onto > >> the liability at the statement date, and then payment when I make a > payment. > >> > >> Liabilities accounts are used to record money you’re going to have to > pay > >> at some time in the future, and I use them from credit and debit cards > in > >> my personal Gnucash accounts. > >> > >> Credit card spending is recorded as a transaction between > >> Liabilities:Mastercard and Expenses:Groceries (or whatever) and the > >> Liability disappears when you pay off the credit card (recorded as a > >> transaction between your bank (e.g. Assets:Current Assets:Bank) and > >> Liabilities;Mastercard). > >> > >> Michael > >> > >>> Does it really make any difference to anything? > >> It means you can reconcile expenditure on your credit card with the > credit > >> card statement. > >> > >>> Thanks > >>> > >>> Griffin > >>> > >>> > >>> -- > >>> This email has been checked for viruses by Avast antivirus software. > >>> www.avast.com > >>> _______________________________________________ > >>> 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. > >> _______________________________________________ > >> 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. > >> > > _______________________________________________ > > 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. > _______________________________________________ > 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. > -- Petrovic Jovan, dipl.oec. Financial Controller Energoprojekt Ghana Limited Spintex Road No. 98, Accra Ghana Mob (Ghana): +233 20 9030 435 _______________________________________________ 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.
