On Sun, Oct 06, 2019 at 09:31:26PM -0700, psionl0 wrote in
<[email protected]>:
The sort of accounts you are describing are more correctly a sub-category
of "bank" or "equity" account which can have a positive or negative balance.
By definition, an asset account CAN'T have a negative balance. An exception
may exist for a sub-category of an asset account but only for adjustment
purposes. The parent account overall still can't have a negative balance.
Ditto for Liability accounts and positive balances.
If your business has a client who is both a supplier and a purchaser and
you both operate on account (not cash only) then you will be writing
entries in bot the accounts section and the liability section.
For example, if you purchase a widget from your client (who's name is
Johnny Smith) you might make the following entry:
2019/10/07 * Smith, Johnny
Assets:Widget $ 1000.00
Liabilities:Accounts Payable $ -1000.00
If you sell a service to the client then the entry would be:
2019/10/07 * Smith, Johnny
Income:Service $ -500.00
Assets:Accounts Receivable $ 500.00
When it comes time to settle with this client, the net payment would take
into account both the asset and liability accounts:
2019/10/07 * Smith, Johnny
Liabilities:Accounts Payable $ 1000.00
Assets:Accounts Receivable $ -500.00
Bank:Checking Account $ -500.00
Hi,
Thank you for this and I think I hear what you are saying. That said, I
still think it is not an elegant solution. In my view, the Equity account
should be solely the owners equity or an individuals net worth. Creating a
seperate Bank category would also not be my preference as I'd like to
stick to the five account categories in general use (See:
https://en.wikipedia.org/wiki/Debits_and_credits#The_five_accounting_elements
).
Maybe I used somewhat incorrect terminology in my original post, in my
situation it pertains to the credit/debit position on an account between
two related companies. The credit position on that account at company 1 is
reflected as a debit position on an account with the same name and
characteristics at company 2. Any debit mutation is immediately netted
with an existing credit position and vice versa. I could use the booking
rules as you propose, but then I would always have to do the netting
myself by adjusting Accounts Receivable whenever I adjust Accounts
Payable which also seems cumbersome.
Perhaps what I am looking for, just isn't on offer in ledger? I could
live with that just fine, but thought I would ask anyways :-)
Kind regards,
Remco Rijnders
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