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).
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.
Thanks again,
-Bruce
Christopher Browne wrote:
>
> On Tue, 30 May 2000 21:00:13 PDT, the world broke into rejoicing as
> Bruce and Liz Chaplin <[EMAIL PROTECTED]> said:
> >
> > I am presently trying to set up my GnuCash chart of accounts, and
> > trying to do a better job of organizing them than Quicken did ;-)
> >
> > My question...I travel occasionally for business purposes, and any
> > expenses that I incur are reimbursed to me by the company. I may
> > receive a travel advance, or alternatively I am reimbursed after the
> > fact.
> >
> > What are "business travel advance" and business expense reimbursement"
> > classified as? It is a form of "income" to me, in that money is
> > deposited into my account. However, it is not _truly_ an income (I did
> > not "earn" the money, not does it contribute to my net worth), and the
> > expenses are not _true_ expenses (I did not spend any money overall).
> > I am afraid that creating an income account (like Business Expense
> > Reimbursement), and an expense account (like Business Expenses) will
> > end up creating a false record of what my income/expenses actually
> > are.
> >
> > What is the appropriate way of dealing with these forms of expenses?
> > What accounts should be created to deal with them?
>
> My "business expenses" are pretty few and far between, and so I take
> the rather simple approach of applying reimbursements to reduce the
> expense in the account in which I applied the expense.
>
> For instance, if I buy computer supplies for office use, I'll expense
> the item under "Computer" expenses. When I receive the reimbursement,
> I'll treat this as a reversal of the expense.
>
> If you wanted to track this sort of thing in greater detail, monitoring
> month-to-month amounts that the company owes you, I'd suggest setting up
> an asset account, "Receivable from Company," and then having the
> "not-really-my-expenses" and the "not-really-my-incomes" go against that
> Receivable account.
>
> --> If you get an advance/reimbursement
> DR CR
> Cash $500
> Receivable from Co $500
>
> --> Spent money on dinner on the road
>
> DR CR
> Receivable from Co $40
> Credit Card $40
>
> The question here will be whether you normally owe money to the company
> (e.g. - they generously pay you advances beforehand), and thus should
> treat that "holding account" as a liability, or whether you normally
> pay bills, and the company owes it to you, meaning that this "holding
> account" is usually going to be an asset.
>
> Hope this helps...
> --
> [EMAIL PROTECTED] - <http://www.ntlug.org/~cbbrowne/lsf.html>
> So long and thanks for all the fish.
>
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