Split Transactions

[Mike or Penny Novack]

Tony Nelson wrote:

>Hi List,
>
>I know this is a basic question, and I have sniffed around the doc and
>FAQs, but I can't find it answered.  
>
>I am in my check register, attempting to write a check to a Credit Card
>company.  In QuickBooks I can easily itemize the payment.  For example:
>
>Airfaire: $140.00
>Meals: $37.20
>Meals: $16.11
>Office Supplies: $11.11
>
>As itemized entries are recorded QuickBooks totals up the items so that
>the amount on the check reflects the correct total.
>
>I don't see a way to do the same in gnucash, but I'm certain it must be
>there.  Can someone give me a hint on how to achieve this?
>
>  
>
This is really an accounting question. You should have an account of 
type liability for the credit card. When you get a statement from the 
credit card company you enter a transaction to show the increase in this 
liability and that can be a split transaction allocating to the various 
expense accounts. The when at some later date you write a check to pay 
off the credit card company that decreases the liability (to zero if you 
pay the balance in full -- still a liability owed if you don't pay the 
balance in full).

If an accounting system waited till the bill was paid to record this 
liability and these expenses then any balance sheet report or 
income/expense report produced during the interval (bill received to 
bill paid) would be incorrect. In any case it's not the amount of the 
check which needs to get allocated to the expenses (you might not be 
paying off the entire balance or you might be paying off more than the 
current charges).

Michael