Re: question about posting

[ario <..hidden..>]

Yes! Thanks to dwmbeancounter.com I now even do understand what you
mean. What seems to make LSMB especially useful for us is the
implementation of Projects and Departments with the possibility of
creating a balance per department.

Now there's one conceptual thing that I am still trying to figure out.
And that's borrowing between departments. Our departments will
constantly borrow cash from each others wallets and I have no idea how
to implement that on de COA, while being able to constantly keep track
of their balances for each department.
Of course I could make liabilities and asset accounts that would look
like:

1210	borrowed to dept 1
1220	borrowed to dept 2
2310	borrowed from dept 1
2320	borrowed from dept 2

so that the balance would be reflected on each department's balance
sheet, but of course would be zero on the company's balance sheet.
I feel however as if it wouldn't be justifiable to use a company's asset
(liability) account to reflect money borrowed by one department to
(from) one of the other departments.

I hope my explanation of what I desire was clear enough.
Is there any ready accounting solution for this?

Thanks again,
ario


On Wed, 2010-06-09 at 00:34 -0700, Chris Travers wrote:
> On Tue, Jun 8, 2010 at 10:08 PM, ario <..hidden..> wrote:
> > Good day,
> >
> > I've got just newly involved in both accounting and ledgersmb, so I'm
> > afraid this won't be my last posting to this list :)
> >
> > For a farm that's growing rice among other products I'm trying to set up
> > an accounting system and I chose for LedgerSMB.
> >
> > So here's the deal:
> > For the preparation of seedlings, somebody is plowing a seedbed where
> > the seeds will be sown for later transplantation in the rice field.
> > For this I created the account:
> >
> > 1. 5220 cogs/madboat seedbed
> >
> > As I understand from my newly acquired knowledge about accounting,
> > things that add to assets are 'debited' and items/money that go out of
> > the system are 'credited' in the books.
> 
> That's correct.
> 
> > So I was considering entering the following in the general ledger:
> >
> > Department: rice field 1
> > Project: first cropping 2010
> > account debit   credit
> > 5220            400
> This is an expense, right?  It should be a debit.
> 
> > 2100            400
> This is a liability, right?  Credit is right.
> 
> > but I'm afraid this doesn't make sense, because whenever I push the
> > 'update' button, it adds a new line with account nr. 1010 in the
> > transaction window.
> >
> > I was thinking along the line: plowing (5220) costs money (400) so
> > that's put on the credit side, accounts payable (2100) will increase the
> > liabilities (400) so that's also put on the credit side. However, I
> > don't think an entry like this will balance.
> 
> Right.  Because neither of these are assets.  Your liability side
> should go on the credit, and the balancing expense side goes in as a
> debit.
> 
> Best Wishes,
> Chris Travers
> 
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