[moneydance] A charity account

[Yehudit Winiarz]

Mike,

Thanks, I think I understand the basics of what you are telling me. I
didn't completely get what you meant by "the common practice of
recording business expenses against an 'accounts payable' liability"
(I will google and try to figure it out). Additionally, I have a
question about the functionality of the charity/future category (it
won't be reflected correctly when I use the direct payment from
checking to liability option - I like simplicity) Should I then ignore
it at that point?

Thanks again for all your help!
Yehudit

On Oct 29, 2007 12:25 PM, Michael Casteel <mac at casteel.org> wrote:
> On 10/28/07, Yehudit Winiarz <ym.design1 at gmail.com> wrote:
> > Charity (#2) or CHARITY (#3) category/liability. I have not figured a way to
> > correctly reflect my deposits into the charity bank account as an
> > increasein liability. Which category/account should it be listed under
> > to reflect
> > the true situation?
>
> Here is one way to remove the funds moved to the charity bank account
> from your net worth. It uses a new expense account (category) I call
> charity/future, which you would need to create.
>
> 1. Make an entry to move the funds from your normal checking account
> to your charity/checking account. This will track the bank balances
> for you.
>
> 2. Make an entry increasing your Charity/future category and
> increasing your Charity/liability
>
> This is analogous to the common practice of recording business
> expenses against an 'accounts payable' liability. An increase in an
> expense account charity/prepaid) is balanced by an increase in a
> liability account, charity/liability (or a decrease in an asset
> account, if you are paying the expense directly, say from the checking
> account).
>
> More fancy footwork comes when you write the check from the
> charity/checking account to the actual charity. You need to reduce the
> charity/checking account to match the bank statement, but you also
> want to reduce the charity/liability to keep your net worth report
> correct.
>
> If you want to use a charity/donations category to track the tax
> deduction, you could record the check from charity/checking using a
> charity/donations expense account. Entries in the latter account would
> then represent tax deductions, at least in the US. To correct the net
> worth, you would also have to make another entry to reduce the
> charity/liability, now that you have actually disposed of the asset.
> You could make a reverse entry to charity/future to decrease both it
> and the charity/liability.
>
> Or, more simply, you could make a single entry applying the check from
> the charity/checking account against the charity/liability directly.
> Just like a business would when cutting a check from 'accounts
> payable'. This is the entry you want to report for the tax return.
> --
> Mike Casteel                                        Seattle, WA
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