69 votes
Accepted

What does "gold reserves" on a gold mining company's balance sheet mean?

For gold mining companies, the amount of gold that the company has access to but has not yet been mined is accounted for in "reserves". The company can claim a percentage of those reserves as assets, ...
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  • 114k
62 votes
Accepted

What are the advantages of doing accounting on your personal finances?

In my opinion, every person, regardless of his or her situation, should be keeping track of their personal finances. In addition, I believe that everyone, regardless of their situation, should have ...
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42 votes

How to teach personal accounting to an 8-year-old

If I were you I would simply use a check register, cash, and jars. Check register sheets can be printed online and increased to an appropriate size. I really like Dave Ramsey's teaching on this. ...
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  • 74.9k
30 votes

Are stocks and bonds actually liquid?

The second quote sounds like complete nonsense to me. There is no "high cost to their owner" from converting the stocks into cash. The high cost comes from the stock losing value. That an asset can ...
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27 votes

How to teach personal accounting to an 8-year-old

I've recently switched over to an allowance system that is attempting to teach my son the value of money, and more specifically, saving money to earn more money. It's a very exaggerated interest-based ...
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  • 279
25 votes
Accepted

How to divide up utilities when one tenant's rent includes utilities, but others' don't?

In my opinion, subtenant B should pay 1/4 of the utilities. Each person consumes 1/4 of the utilities. Normally, each person would pay 1/4 of the utilities. However, Subtenant A has an agreement ...
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25 votes

How to teach personal accounting to an 8-year-old

Since she essentially only has a cash register, a simple cash journal should do the job. Have her do weekly sums and compare with the contents of the piggy-bank. If she forget to record some ...
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  • 5,236
16 votes

Why use accounting software like Quickbooks instead of Excel spreadsheets?

I would say that all of the reasons you list in your question are valid, and I would add the following... You are in the landscaping business, not the accounting business. If you manage everything in ...
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  • 3,795
14 votes
Accepted

Are stocks and bonds actually liquid?

From your second Investopedia link: For a consumer, a lack of liquidity can mean borrowing at a high rate of interest, selling a possession at a probable loss, or failing to pay the bills on time. ...
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  • 73.7k
14 votes
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Double entry bookkeeping - Record incoming money which I would hold temporarily as a custodian

The correct accounting, assuming that if 500 comes in, you're sending the whole amount to your dad would be Debit Asset/Cash/MyBankAccount for 500 Credit Liability/Payable/Dad for 500 Then when you ...
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13 votes
Accepted

How to account for months lapse in tracking finances

I'd say you have a couple options that differ by the amount of time required. Option 1: Export your checking/credit card ledgers from your banks for the unaccounted for periods you mention then ...
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  • 1,408
13 votes
Accepted

In a Budget is Saving Considered an Expense?

I have a saving section but I am not sure if it is considered an expense? and how do you account for it at the bottom of the budget Budgeting approaches can vary. In my opinion, a zero-based budget ...
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  • 63.9k
12 votes

Starting with GnuCash. How to eliminate automatic entries ending up in the "unbalanced" account?

I just decided to start using GnuCash today, and I was also stuck in this position for around an hour before I figured out what to do exactly. The answer by @jldugger pointed me partially on the right ...
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  • 285
11 votes
Accepted

How to double-entry bookkeep money incoming from sold items?

If you were a business, all your assets would have a dollar value, so when you sold them you'd decrease the amount of assets by that amount and increase in cash, and if there was a profit on the sale ...
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  • 1,324
11 votes
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Simplified version of double-entry bookkeeping for personal and business finance?

I'm a mathematician, not an accountant. But my feeling has been that the distinction between Asset and Liability is mainly a sign convention, and comes from a wish to avoid negative numbers. Suppose ...
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11 votes

What are the advantages of doing accounting on your personal finances?

Everyone should keep track of what they spend. When you see how much you are spending on each category of expense, you can make good decisions about how much your life is improved by something vs. how ...
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10 votes
Accepted

Presenting negative numbers using parentheses: where does this practice come from?

I'd love to see if someone can find a convincing origin story for the practice, but I believe it became adopted simply because parenthesis stand out more than a negative sign. Think of a hand-written ...
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  • 63.9k
10 votes

Does Apple have $0 of treasury stock?

Treasury stock is not really represented in the Balance Sheet as a "Treasury stock" line item in the assets. Some companies will break out Treasury Shares as a line item in the "Shareholders Equity" ...
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  • 48.5k
10 votes
Accepted

Claiming income/deductions on an illegal apartment

The IRS demands and expects to be paid tax on all taxable activity, including illegal activity. If they expect drug dealers, hit men, and smugglers to pay tax, they expect you to pay tax on your ...
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  • 14.9k
10 votes

Double entry bookkeeping - Record incoming money which I would hold temporarily as a custodian

If these are your personal accounts, and you consider your dad a separate financial entity - such that your owings to him are a Liability - then the cashflow isn't Income for you at all. It's ...
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9 votes

How to resolve imbalances and orphan transactions in Gnucash?

The GnuCash manual has a page with examples of opening new accounts. The tl;dr is: use the Equity:Opening Balance to offset your original amounts. The further explanation from the GnuCash page is: ...
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  • 473
9 votes

Are stocks and bonds actually liquid?

Let me address why stocks can have wildly differing levels of liquidity. It all comes down to one thing: for you to sell your shares, someone has to be willing to buy them. For a typical investor? ...
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  • 2,600
8 votes

Account that is debited and account that is credited

Strictly speaking the terms arise from double entry book keeping terminology, and don't exactly relate to their common English usage, which is part of the confusion. All double entry book keeping ...
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  • 188
8 votes
Accepted

What is the Equity account for in GnuCash?

The Equity balance is your Assets (stuff you own) minus your Liabilities (debts you owe to others). It represents your "net worth" - how much money you would have when you would pay all your debts. ...
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  • 21.6k
8 votes

What tax year does my income get assigned to if my client sends the payment in December but I receive it in January?

If you run your business on a cash basis: January If you run your business on an accrual basis: December Confused? see your CPA
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  • 2,040
8 votes

Is the blockchain similar to double-entry book-keeping?

Does this mean that double entry book-keeping is practically a blockchain, with each block being a transaction? Not exactly. In double entry book-keeping, every institution keep its own accounts that ...
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  • 56.6k
8 votes

Question about double-entry accounting

I wonder if you're confusing "account" as meaning a bank account. An account, in accounting terms, is merely a ledger or list of transactions. Say that you receive some cash. Where did that cash come ...
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  • 243
8 votes
Accepted

Is a checking account in the negative still an asset?

The overdrawn checking account would still be an asset in the context of a balance sheet or any type of aggregation. It would just have a negative balance. Same goes for the overpaid loan - it would ...
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  • 114k

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