I think that you missed the fact that I actually wrote a check to Johnny Smith. It was a single check and a single entry that cleared both Johnny Smith accounts simultaneously so that there is no longer an outstanding balance for Johnny Smith.
In my business, I prefer my Ledger entries to match the paperwork I have precisely. I want my balance sheet to show the total of all the bills I still have to pay and the total of all of the invoices that I am waiting for my customers to pay me (even if the payee is the same in both cases). I'm sure the tax man wants it that way too. Calling assets with a positive balance a liability just so that you have a single negative number at the end called "liabilities" doesn't sound like good bookkeeping practice to me. Similarly, if I pay several invoices to a supplier with a single check then my Ledger entry would look something like this: 2019/10/11 * Smith's Petrol Liabilities:Accounts Payable $ 50.00 ; 0110 Liabilities:Accounts Payable $ 40.00 ; 0112 Liabilities:Accounts Payable $ 55.00 ; 0122 Liabilities:Accounts Payable $ 35.00 ; 0126 Bank:Checking Account $ -180.00 This entry shows which invoices were paid (including the supplier's invoice numbers) and when I reconcile my bank statement, the single number at the end will match the amount that was taken out of my bank account. On Friday, October 11, 2019 at 6:40:18 AM UTC+8, Remco Rijnders wrote: > > I think you misunderstood me. I have exactly one entry per > transaction. > > > 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 > > I would book the above now as: > > account Assets:Current Account > alias Current Account > account Liabilities:Current Account > > 2019/10/07 * Smith, Johnny > Assets:Widget $ 1000.00 > Current Account $ -1000.00 > > 2019/10/07 * Smith, Johnny > Income:Service $ -500.00 > Current Account $ 500.00 > > Due to the nature of this account (related company), and perhaps my > locality as well, there is no need for me to settle anything. I am just > interested in this showing up in the correct place when I work on my tax > return. > > When I run a balance on the above entries, it will report Assets:Current > Account with a balance of $ -500. As this is not what I wish to show in my > report, I change my account entries to: > > account Assets:Current Account > account Liabilities:Current Account > alias Current Account > > and run the report again. Now the $ -500.00 shows up as a liability as I > want. All I need to do is move the alias once a year (if that, it could > just be correct as it is) and be done with it. > > Cheers, > > Remco Rijnders > -- --- You received this message because you are subscribed to the Google Groups "Ledger" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To view this discussion on the web visit https://groups.google.com/d/msgid/ledger-cli/28b92f16-6b23-4203-bdeb-dc86985343eb%40googlegroups.com.
