Prepaid Expenses

Hi,

How does one account for prepaid expenses in Money? Let's say I pre-pay my
insurance. It will come in as an expense but will not reflect on my budget
properly??

Thanks in anticipation

Dick
Sun Jul 24 20:23:23 CDT 2005

I'm not sure I follow your case, but I use a category, not in Budget, called
"Miscellaneous:Deposit, credit to follow" for anything where I expect to
expense something in the future but am putting money into the deal now. Say
I put a deposit on some custom Koa wood furniture I order. Then I buy it
after it gets built. Here are the two transactions:

Txn1:
$2,000 Miscellaneous:Deposit, credit to follow

Txn2:
$875 (split)
$2,875 Housing:Furnishings
($2,000) Miscellaneous:Deposit, credit to follow

The Miscellaneous:Deposit, credit to follow category gets back to $0. The
actual cost of the item is expensed.

"Tony" <Tony@discussions.microsoft.com> wrote in message
news:6534800C-F750-46A9-9F51-F5440D871B24@microsoft.com...
> How does one account for prepaid expenses in Money? Let's say I pre-pay my
> insurance. It will come in as an expense but will not reflect on my budget
> properly??

Chris
Sun Jul 24 21:05:00 CDT 2005

GAAP treatment of prepaid expenses is outside the normal range of practice
discussed here. You can still do it, though. Just create a 'bank' account
called 'Prepaid Expenses'. Make it 'in budget' on the details page of the
account.

Pay insurance by a transfer to that account. The insurance payment will not
be reflected in the budget, but will be reflected in cash flow. Scheduled a
bill to pay the periodic allocation of the expense, using the prepaid
expenses account as the source. Categorize to insurance. Those periodic
bills will be reflected in the budget.

Are you doing this for a small business that has to provide financial
statements to a bank, or something? Or for your personal financial accounts
only? If the latter, why bother?
--
Chris Cowles
Gainesville, FL


"Tony" <Tony@discussions.microsoft.com> wrote in message
news:6534800C-F750-46A9-9F51-F5440D871B24@microsoft.com...
> Hi,
>
> How does one account for prepaid expenses in Money? Let's say I pre-pay my
> insurance. It will come in as an expense but will not reflect on my budget
> properly??
>
> Thanks in anticipation
>

Tony
Mon Jul 25 20:56:02 CDT 2005

Hi,

Thanks for the prompt responses. I am doing this for a personal account and
will give your suggestions a try.

Thanks!

"Chris Cowles" wrote:

> GAAP treatment of prepaid expenses is outside the normal range of practice
> discussed here. You can still do it, though. Just create a 'bank' account
> called 'Prepaid Expenses'. Make it 'in budget' on the details page of the
> account.
>
> Pay insurance by a transfer to that account. The insurance payment will not
> be reflected in the budget, but will be reflected in cash flow. Scheduled a
> bill to pay the periodic allocation of the expense, using the prepaid
> expenses account as the source. Categorize to insurance. Those periodic
> bills will be reflected in the budget.
>
> Are you doing this for a small business that has to provide financial
> statements to a bank, or something? Or for your personal financial accounts
> only? If the latter, why bother?
> --
> Chris Cowles
> Gainesville, FL
>
>
> "Tony" <Tony@discussions.microsoft.com> wrote in message
> news:6534800C-F750-46A9-9F51-F5440D871B24@microsoft.com...
> > Hi,
> >
> > How does one account for prepaid expenses in Money? Let's say I pre-pay my
> > insurance. It will come in as an expense but will not reflect on my budget
> > properly??
> >
> > Thanks in anticipation
> >
>
>
>