On Wed, 31 May 2000 20:09:47 PDT, the world broke into rejoicing as
Bruce and Liz Chaplin <[EMAIL PROTECTED]> said:
> Hi all,
>
> Thanks for the responses to my question.
>
> I especially like the one proposed below by Christopher Brown, using
> an Assets -> Account Receivable account. Since I am an engineer, not
> an accountant, I'd like to make sure that I have the details correct,
> in particular for the case where I eventually get paid for these
> expenses. The normal case is that I usually spend my own money, and
> then get reimbursed (I previously threw the expense advance scenario
> in there for completeness).
One minor irritant: that should be "Browne." Don't worry; I won't be
looking up your address so I can drive by your house and pelt it with
bits of foam made into the shape of lower case "e"'s :-). I'll just
think happy thoughts and watch an extra episode of Monty Python at
some point :-).
> So, to recap Chris's proposal:
>
> > --> Spent money on dinner on the road
> >
> > DR CR
> > Receivable from Co $40
> > Credit Card $40
>
> OK, so now I get paid by the company, and the money is deposited into
> my checking account:
>
> DR CR
> ------------------------------------
> Receivable from Co $40
> Checking $40
>
>
> And now I pay my credit card bill:
>
> DR CR
> ------------------------------------
> Checking $40
> Credit Card $40
>
>
> Is that correct? I'm doing what seems "intuitive" to my
> "non-accounting" brain ;-) If not, how should it be handled? It seems
> like a lot of work/entries to me.
I think you're trying too hard to make accounting appear "non-intuitive."
Your intuition looks to be working quite all right. (Accounting is like
that; the "learning curve chasm" is there, but it is not all that much
worse than the "Unix learning cliff.")
And it really _doesn't_ add any more work, as you're going to be making
several entries _anyways_.
a) You'd be entering the transaction for the expenditure anyways, so
that you can reconcile the credit card account; that's one.
b) When you pay the credit card bill, that's a second transaction.
c) When the money comes from the company to pay for the expenditure,
that's three transactions.
Nicely corresponding to the three transactions that you show up above.
The _only_ odditity is that instead of the expenditure going to an
expense account, it goes in the "Receivable from Company" account.
--
[EMAIL PROTECTED] - <http://www.hex.net/~cbbrowne/linux.html>
What happens when your "Windows Digital Nervous System" crashes? Do
we call that a "Microsoft Nervous Breakdown?"
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