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Categorizing a transaction after money has been transfered

Steve Haller

I have a situation where I will pay for items for my daughter via my credit card and I am trying to track these expenses along with the eventual payment from her to off set the expense.

I was reading online and it suggested to set up an offline asset account. So I did that and labeled it with her name.

In my credit card account I now can categorize any expense using that asset account name and it shows up in that new account list.

Now when she pays me back I get a transfer from her checking account to my checking account. The transaction uses the transfer categories for her account and mine to show where the money is coming from and going to.

so let’s say I bought her a 20$ item. She has now transferred the 20$ to me. How can I now categorize this 20$ as the offset or payment in that Asset account I set up so I can see an accurate running total of what she owes me?

perhaps there is an easier way to track what my daughter or any other family member owes me that would allow me to easily monitor and run a report each month. I am open to suggestions.

Sincerely

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UKR

so let’s say I bought her a 20$ item. She has now transferred the 20$ to me. How can I now categorize this 20$ as the offset or payment in that Asset account I set up so I can see an accurate running total of what she owes me?

Are you tracking your daughter's checking account within your personal Quicken data file?
That's what makes this conundrum. One cannot record a transfer between accounts and categorize it at the same time.

Your daughter being old enough to have a checking account, she should also have her own personal Quicken data file, separate from yours. You no longer record anything in your daughter's account (the one in your personal data file)
In that case, the above situation would be simple:

You pay for something for your daughter with your credit card and record it in the credit card register:
Macy's, $20.00 charge, category = [daughter's account]
Daughter transfers money into your checking account:
Daughter, $20.00 deposit, category = [daughter's account]

Tom Young

IF you have both your daughter's checking Account and your checking Account in the same file THEN the sequence of entries in the file that would capture all the elements of the entire transaction would be along the lines of:

Debit (Increase) "Receivable from Daughter" Account $20.00
Credit (Increase) "Dad's Credit Card" Account $20.00

To record credit card charge on Dad's Account that daughter is obligated to pay back

Debit (Increase) Some "daughter" Category $20.00
Credit (Increase) "Liability to Dad" Account $20.00

To record daughter's obligation to dad and the Category of expense she wants to use for the purchase

Debit (Decrease) "Liability to Dad" Account $20.00
Credit (Decrease) "Daughter's Checking" Account $20.00

To record daughter's repayment of amount owed to Dad

Debit (Increase) "Dad's Checking" Account $20.00
Credit (Decrease) "Receivable from Daughter" Account $20.00

To record deposit of daughter's check into Dad's checking and clear receivable from her

That's the complete set of entries between the two different "entities", i.e., daughter and dad. This can get a little confusing but it's much easier to follow if daughter and dad are in two different Quicken files.

q_lurker

I hope this is simply a restatement of what @"Tom Young" said. This is as much for my benefit and understanding as others.

In case you missed it, in his setup there are two Daughter's accounts and three Dad's accounts (If I have this right).

Dad's CC account
Dad's Checking account
Dad's "Daughter owes me" asset account
Daughter's Checking account, and
Daughter's "Daughter owes Dad" liability account

First action - Dad buys $20 of books on credit card for daughter

Dad's CC account - Bookstore, $20 Category = [Daughter owes me]
Daughter's [Daughter owes Dad] liability account - $20 Category = Books
Those are two separately entered transactions. The CC entry will create a matching entry in the [Daughter owes me] account

RESULT

Dad's CC bill increases (he owes more)
Dad's asset account (Daughter owes me) increased (she owes him)
Dad's net worth is unchanged (an increase debt and an equally increased asset)
Daughter owes Dad $20 (but she also has the $20 of books)
Dad's asset account shows she owes him $20
Daughter's liability account shows she owes him $20

Second action - Daughter pays down $10 of debt to Dad

Daughter writes check to 'Dad" for $10 entry in her checking account, Category =[Daughter owes Dad] liability account
Dad deposits check in his checking account Category = [Daughter owes me] account
Also two separately entered transactions; These two both create matching entries in the referenced "Daughter owes … ] account

RESULT

Her assets (checking account) are reduced but so are her debts (liability account) - no overall change
His checking account asset is increase by $10, but is asset receivable account is reduced by $10 - no overall change
Dad's asset account shows she owes him $10
Daughter's liability account shows she owes him $10

It should be obvious that at all times the two "Daughter owes …" accounts should be in agreement and both reflect reflect what she owes Dad, one from his perspective, the other from hers.

If the Daughter's two accounts are in Dad's File, they should be set as "Separate" accounts, independent of his overall net valuation. As others have said, really better to have her accounts in her file.