5

I am new to accounting and trying to learn a few things as my accounts get more and more complicated. I currently use GnuCash to record simple income/expenses/assets/liabilities and have had a new situation I don't know how to record.

I am currently billing some expenses for work and for my kayak club to my personal credit card. Under normal circumstances I would do the following (my +/- may be backwards):

Expense +$100 Credit Card -$100

and then when the credit card bill comes I would pay it off

Credit Card +$100 Chequing Account -$100

For expenses that I get reimbursements for I would like to be able to note that I paid for the expense with my credit card and that I paid off my credit card with my chequing account.

At the same time, I would like to be able to create another parent account (maybe "claimable expenses") that shows that I purchased the item, and was then reimbursed so that an individual expense for work or my club has a zero balance.

I tried to look this up in previous threads but didn't quite understand how to apply this to my situation Any advice would be appreciated.

  • 2
    It sounds like you want to create an Asset account(s) for the reimbursement. This is money owed to you so an Asset for you and a Liability for the other party (work, kayak club). (am not an accountant, and have not done this, but have heard this as "the way to do it") – verdammelt Feb 16 '15 at 19:47
  • 1
    Its called "account payable", and it is an asset account. – littleadv Feb 16 '15 at 21:27
  • Looking this through I am not sure if it is an Accounts Receivable or Accounts Payable (my guess based on my reading is Receivable). I am not sure how to do this so if any one can chime it, I would really appreciate it. – Dan Feb 18 '15 at 0:26
6

When you spend $100 on kayak supplies, you have lost $100 worth of assets (or incurred $100 worth of liabilities if you borrowed the money), but you have gained another $100 asset: the right to be paid $100 as reimbursement. So this really should be a transfer to an asset account.

I handle this for myself by making a top-level Asset account named Reimbursable, with sub-accounts for different projects, organizations, etc. So you could make one called Reimbursable:Kayak Club. When you spend $100 from your credit card on kayak supplies, make a transaction that charges $100 to Credit Card and credits $100 to Reimbursable:Kayak Club. When you receive $100 in reimbursement and deposit it in your bank account, make a transaction that debits $100 from Reimbursable:Kayak Club and credits $100 to Bank Account.

The balance in Reimbursable:Kayak Club represents the amount of reimbursement you have coming to you. Once everything is settled, Reimbursable:Kayak Club should have a balance of 0.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.