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How to record (accepting and later returning) other peoples' money in GnuCash?

  • I assume it would not be recorded as income / expense, respectively.
  • Liabilities also seems unlikely.
  • Equities? Maybe...
  • Assets seems the most likely candidate.

But I'm just guessing wildly... Could not find anything relevant on Google, neither :(


Also, what's the correct terminology for:

  • the account: custody / (lawyer/notary) trust / escrow / fiduciary / suspense
  • the money: other peoples' money (OPM) / third-party funds
  • the booking entry/entires: pass-through / temporary / transitory item
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There are four sides to this transaction.

You increase in money: A debit. (increases your Current Assets, if you will) You also gain the requirement to pay that money in the future. A credit: Definitely a Liability.

When you repay the money, your cash will decrease: a credit, and your liabilities will also decrease, which is a debit (since you don't have to repay the money anymore).

the account would be short-term loans, the money doesn't have a name, it's just cash and would go into whatever cash accounts you have. The bookkeeping entry would be the same as you would make for any short-term loan.

  • I was suggesting Liabilities in my original question (and answer, a day before yours). Now what you highlight in your answer is Liabilities, too. What then makes you state "none of the accounts you highlighted seem correct" ? – shoyu Sep 4 '14 at 7:57
  • You've edited your question since I posted that. Previously you had a list of different accounts to book it under. (Either that or I misread the second half of your question). Liabilities is not an account, it is a type of account – serakfalcon Sep 4 '14 at 8:22
  • All my edits were prior to your answer. Which was after I figured the concept out myself. Terminology is still outstanding. – shoyu Sep 4 '14 at 12:00
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Maybe not the official solution satisfying int'l convention / legislation, but at least has some logic to it (though I myself am not 100% convinced as yet):

  • Liabilities !

    ... but is it really a liability?


Rationale:

  • Someone gives me their money (just to look after it, say for a week; no interest, ROI, etc).
  • Ups my bank account statement and/or my cash-in-hand/wallet.
  • And simultaneously ups my liabilities: since what difference does it make if I borrow some money (to use it or not use it, repay later) or if someone just wants to "store" some money with me: w.r.t. balance sheet I'd say: zero...

    ... with the one caveat that it might make a difference w.r.t. taxation ?

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