When I travel on business, my employer pays for my meals by reimbursing me at a statutory "per diem" rate. Often this exceeds the amount I actually spend on meals. How should I account for the excess in a double-entry accounting system? I use Gnucash.
Currently I am recording the excess as income, but I am not sure if this is correct.
As an example, suppose I take a 3-day business trip to Gotham City, for which the per diem rate is $50 per day. So my employer pays me $150 as a "reimbursement" for my meals. However, suppose I actually spent only $90 on meals during the trip. I want to know how to account for the extra $60.
Here is how I am currently recording this in Gnucash.
I create an Asset account for this trip to record reimbursable expenses. Expenditure of $90 on meals is a transfer of $90 from the Liability account
Liabilities:Credit Cardto the Asset account
Assets:Reimbursable:Gotham City. (I understand it would also be possible for the latter account to be of type Accounts Receivable.)
When the reimbursement payment is made (direct deposit to my checking account), I enter a split transaction with a credit of $150 to the Asset account
Assets:Checking, a debit of $90 to
Assets:Reimbursable:Gotham City, and income of $60 from an Income account named
This balances the books, but it seems a little peculiar for this reimbursement to be "income". (For one thing, to the best of my knowledge, it is not taxable income in my jurisdiction.)
Even if it is properly considered income, is there a better term than "excess reimbursement"? It seems to me that this might look odd or suspicious to someone examining my books.