Hi ,
It looks like you're using an ad blocker.



The revenue generated from the adverts on the site is a critical part of our funding - and it's because of these ads that I can offer the site for free. But using the site for free AND blocking the ads doesn't feel like a great thing to do, which is why this box is so large and inconvenient. Some sites will completely block your access, but I'm not doing that - I'm appealing to your good nature instead. Did you know that you can allow ads for specific sites, whilst still blocking them on others?

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Home book keeping for the compleat Fetchie

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Aug 2022
11:12am, 19 Aug 2022
138,453 posts
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GregP
Okay, thanks. That's instinctively what I would do - the only problem being that £10,000 of my balance isn't, as it were, real.

I'm struggling to explain what it is I'm not understanding. Let's try again.
Aug 2022
11:14am, 19 Aug 2022
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GregP
I have £30,000.

I buy a widget today for £10,000, but payment isn't due for a year.

So I've simultaneously got £30,000 and £20,000.

We need a pub/café/whatever that all Fetchies can decamp to in times of face-to-face need.
Aug 2022
11:22am, 19 Aug 2022
65,066 posts
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GlennR
Good grief.

Today you have two classes of asset, cash of £30,000, Widget at £10,000. You have a single liability, a creditor of £10,000.

Net assets £30,000. As they were before you bought the Widget, until depreciation comes into play.
Aug 2022
11:25am, 19 Aug 2022
138,461 posts
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GregP
Jeepers. Okay.

I have £30,000.

I lose £10,000 in a casino, but payment isn't due for a year.

So I've simultaneously got £30,000 and £20,000.
Aug 2022
11:26am, 19 Aug 2022
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Dooogs
If it were a company / org with Proper Accounts, you'd follow the Glenners model.

However for kitchen table accounts, I think just accounting on a cash basis* is fine. Right now, you still have £30k in cash. Theoretically, you could renege on that debt if you don't mind having the WidgetCo repo man after you...

*(government accounting didn't move away from this for Departmental accounting until the early 2000s!)
Aug 2022
11:26am, 19 Aug 2022
23 posts
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Slowboy
What GlennR said. The bit you were missing is the creditor of £10k
Aug 2022
11:28am, 19 Aug 2022
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♪♫ Synge ♪♫
I suppose it depends on whether you are simply using the spreadsheet to track the cash that you receive, pay and have (ie a "cash book"), or whether you are wishing to wishes to track assets and liabilities as well?
Aug 2022
11:29am, 19 Aug 2022
65,067 posts
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GlennR
Hi Slowboy.

It's the same principle with your casino example Greppers, except you now have net assets of £20,000, an asset of £30,000 and a liability of £10,000.
Aug 2022
11:30am, 19 Aug 2022
46,138 posts
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♪♫ Synge ♪♫
The superfluous "to wishes" in that sentence may be removed to aid understanding. :)
Aug 2022
11:33am, 19 Aug 2022
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GlennR
I think that unless we are talking about something more than cash accounting there is no point in the example at all.

The reductio ad absurdum is that if I buy a house today for £200,000 on a 100% mortgage but the first mortgage payment isn't due until next month, am I really going to claim I have assets of £200,000 today?

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Be gentle, for I am just a simple soul.
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