https://www.reddit.com/r/plaintextaccounting/comments/1ef8fgx/advice_on_how_to_record_complicated_transactions/
Some discussion of expenses vs receivables in bookkeeping.
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Given the confusion, I thought I'd also weigh in. In the Reddit thread, u/pranshugoyal's solution and u/tragickhope's second solution are right from a double-entry bookkeeping (DEB) perspective. Specifically, the first solution by u/tragickhope and both of u/gumnos's solutions are wrong in terms of DEB. You could say that "PTA is just a tool that you can use however you want." In that case, there's no "right" or "wrong". But if you would like to follow standard accounting, then (esp. in simple cases like this) there are clear right and wrong ways of doing things.
When your roommate pays back a debt, that is not revenue/income, it is merely you receiving what is already owed to you. Your "expense" for electricity is also not USD 200; it is only USD 100. The other USD 100 you pay is on behalf of your roommate, and hence isn't an "expense", but money you're owed.
2024-08-04 TNEB | Electricity
Expenses:Utilities:Electricity USD 100.00
Assets:Receivable:Persons:Alice USD 100.00
Assets:Checking:BoA USD -200.00
2024-08-05 TNEB | Electricity | Alice Repayment
Assets:Checking:BoA USD 100.00
Assets:Receivable:Persons:Alice USD -100.00
If you want to note that Alice owed you for electricity in the account name itself, you can use sub-accounts:
Assets:Receivable:Persons:Alice:Electricity USD 100.00
That way you can tell Alice how much she owes you for what a glance through a simple balance report:
$ hledger bal alice
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Coming from ledger, I'm very much in the bandwagon of
But I'm willing to learn as PTA is also a gateway into Accounting for me.
What would be considered revenue/income here? Salaries are the only thing I've considered income until this moment. Are there more?
Income is any money that you earn that is not repayment of something already owed to you in the past.
So these are all examples of income:
- Salary
- Consultancy fees
- Interest you earn from your bank / from a loan you've given / etc. (but receipt of the principal amount of a deposit / loan is not income).
- Capital gains from stocks, mutual funds, selling of property, etc.
- Gifts
- Money you make by selling things you've made
- Dividend income from stocks you own
As noted in Wikipedia, borrowing or repaying money is not income under any definition, for either the borrower or the lender. Interest (for the person earning interest) and forgiveness of debt (for the person whose debts have been forgiven) are income.
Take a look at this:
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On Reddit I added this unnecessarily convoluted method that you could also use. I thought I'd share it here as well:
I will add: The only way the "expenses" on utilities is the combined expense (for you and your roommate) is if you're keeping accounts for the household instead of for your own self.
If you're tracking household finances, then your books need to include all the assets and liabilities of all of the household members. If you don't do that, the books will not balance correctly. I'm pretty sure your roommate doesn't want you to be tracking all their assets and liabilities.
If you really wish to track Alice's share of the utility expenses as well, and yet make it comply with double-entry bookkeeping, then you need to ensure to add transactions to zero it out immediately, like this:
sol@spica /tmp> hledger print -f temp.j
2024-08-04 TNEB | Electricity
Expenses:Utilities:Electricity:Bob USD 100.00
Expenses:Utilities:Electricity:Alice USD 100.00
Assets:Checking:BoA USD -200.00
2024-08-04 Alice | Electricity Bill | Owed to Bob
Assets:Receivable:Persons:Alice:Electricity USD 100.00
Expenses:Utilities:Electricity:Alice USD -100.00
2024-08-05 TNEB | Electricity | Alice Repayment
Assets:Checking:BoA USD 100.00
Assets:Receivable:Persons:Alice:Electricity USD -100.00
2024-09-04 TNEB | Electricity | Paid by Bob
Expenses:Utilities:Electricity:Bob USD 50.00
Assets:Checking:BoA USD -50.00
2024-09-04 TNEB | Electricity | Paid by Alice
Expenses:Utilities:Electricity:Bob USD 50.00
Expenses:Utilities:Electricity:Alice USD 100.00
Liabilities:Persons:Alice:Electricity USD -150.00
2024-09-04 Alice | Electricity Bill | Not Owed to Alice
Liabilities:Persons:Alice:Electricity USD 100.00
Expenses:Utilities:Electricity:Alice USD -100.00
2024-09-05 Alice | Electricity | Repayment by Bob
Liabilities:Persons:Alice:Electricity USD 50.00
Assets:Checking:BoA USD -50.00
# to find out how much Bob and Alice spent together on electricity
sol@spica /tmp> hledger -f temp.j reg expenses:utilities:electricity amt:'>0'
2024-08-04 TNEB | Ele.. Ex:Ut:El:Bob USD 100.00 USD 100.00
..t:El:Alice USD 100.00 USD 200.00
2024-09-04 TNEB | Ele.. Ex:Ut:El:Bob USD 50.00 USD 250.00
2024-09-04 TNEB | Ele.. Ex:Ut:El:Bob USD 50.00 USD 300.00
..t:El:Alice USD 100.00 USD 400.00
# to find out how much Bob spent on electricity
sol@spica /tmp> hledger -f temp.j reg expenses:utilities:electricity
2024-08-04 TNEB | Ele.. Ex:Ut:El:Bob USD 100.00 USD 100.00
..t:El:Alice USD 100.00 USD 200.00
2024-08-04 Alice | El.. ..t:El:Alice USD -100.00 USD 100.00
2024-09-04 TNEB | Ele.. Ex:Ut:El:Bob USD 50.00 USD 150.00
2024-09-04 TNEB | Ele.. Ex:Ut:El:Bob USD 50.00 USD 200.00
..t:El:Alice USD 100.00 USD 300.00
2024-09-04 Alice | El.. ..t:El:Alice USD -100.00 USD 200.00
This in unnecessarily complicated, with numerous contra-expense postings, though compliant with double-entry bookkeeping.