Martin Hill writes:
> Expenses like tuition are large lump-sum payments but are "consumed" over
> a long period of time.
> ...
> Now if you're interested in the last week's expenses, and you happened to
> pay for your one-year health club membership that week, it won't distort
> the true picture of the week's expenses.
Accountants call this a pre-paid expense. It is an asset, which increases
when you make a payment and decreases each accounting period by that
period's share of the expense.
Thus if you pay $1200 for your one-year health club membership you put
$1200 into "pre-paid expenses". Then each month you record a $100 health
club expense, which you take out of "pre-paid espenses". This will make
your pie charts come out right without resorting to "time spans" in the
journal.
--
John Hasler This posting is in the public domain.
[EMAIL PROTECTED] Do with it what you will.
Dancing Horse Hill Make money from it if you can; I don't mind.
Elmwood, Wisconsin Do not send email advertisements to this address.
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