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Example: $1000 is in savings account
Expected uses
1. Upcoming Annual  Professional Dues: $300
2. Upcoming Annual Insurance         : $700

Initially 
Asset: CASH SAVING           1000.00
Liabiltity: Dues Payable               300.00
Liabiltity: Ins  Payable               700.00

Balance Sheet
CASH           1000.00              

Liabilities    1000.00

Equity           0.00

The invoice arrives and now I need to pay. I have two expense accounts

1. Expense: Professional Dues
2. Expense: Insurance 

Do I need to make a transaction for the invoice? Where do I go from here? What other accounts do I need? After I've paid both bills, I'm thinking my accounts should look like this:

Balance Sheet
 CASH SAVINGS  0.00
 Liabilities   0.00
 Equity        0.00

 Income          0
 Expense-Dues: 300
 Expense-Ins:  700

1 Answer 1

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Since you're talking about dual-side accounting, the liability has to have a corresponding entry somewhere else. In your case - the appropriate expense account. But until the invoice arrives, you don't really have a liability.

So what you're talking about here is budgeting - planning future expenses. Future expenses are not liabilities. They only become liabilities when you accrue them (i.e.: for accrued based accounting - when you sign the contract, per the contract terms, for cash-based accounting - when you pay them).

You'll need to check your accounting software on how budgeting works there, but it is not, usually, done as a liability account.

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