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, ...
- 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 ...
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. ...
- 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 ...
- 10.1k
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 ...
- 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 ...
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 ...
- 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 ...
- 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.
...
- 73.7k
14
votes
Accepted
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 ...
- 365
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 ...
- 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 ...
- 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 ...
- 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 ...
- 1,324
11
votes
Accepted
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 ...
- 6,709
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 ...
- 32.5k
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 ...
- 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" ...
- 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 ...
- 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 ...
- 321
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:
...
- 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? ...
- 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 ...
- 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. ...
- 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
- 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 ...
- 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 ...
- 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 ...
- 114k
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