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Help understanding "Credit Card" type accounts?

mprowe
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Hi,

Trying to setup KMyMoney 5.0.0 on openSUSE Leap 15. The "Transfer" of funds between "Current" accounts seems logical. Subject to a couple of questions, which I'll leave for later.
However, a "Transfer" from a "Current" account to a Credit Card account mystifies me! For example, assume a dummy situation of three accounts:
1. Asset:CurrentAccount1 of type "current", opening balance £100.00
2. Asset:CurrentAccount2 of type "current", opening balance £0.00
3. Liability:CC_Account1 of type "credit card", opening balance £0.00

I would like to insert an image here! But I cant figure out how..
See Image https://drive.google.com/file/d/1V84NWs ... sp=sharing

Step One. Transfer £10 from CurrentAccount1 to CurrentAccount2
Again, see image https://drive.google.com/open?id=1iMHnE ... Xbds8MkVcQ
The result is as I would expect. CurrentAccount1 goes down to £90 & CurrentAccount2 goes up by £10.

Step Two (and this is my problem). Transfer £10 from CurrentAccount2 (or 1, it makes no difference) to CC_Account1.
See image https://drive.google.com/open?id=1r7LET ... eqOhiZ4hVa
Showing £10 leaving CurrentAccount2. So far, so good. But now look at the Credit Card account...
See image https://drive.google.com/open?id=11MYto ... nRNFIcLHY2

Why is it showing a balance of minus £10 (-£10)?

What leap of understanding do I need to make to see the logic in KMyMoney Credit Card" accounts?

Best regards, Martin
PS - Hope the images work for you....

Last edited by mprowe on Mon Oct 08, 2018 7:38 am, edited 3 times in total.
rblackwell
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mprowe wrote:Hi,

Trying to setup KMyMoney 5.0.0 on openSUSE Leap 15. The "Transfer" of funds between "Current" accounts seems logical. Subject to a couple of questions, which I'll leave for later.
However, a "Transfer" from a "Current" account to a Credit Card account mystifies me! For example, assume a dummy situation of three accounts:
1. Asset:CurrentAccount1 of type "current", opening balance £100.00
2. Asset:CurrentAccount2 of type "current", opening balance £0.00
3. Liability:CC_Account1 of type "credit card", opening balance £0.00

I would like to insert an image here! But I cant figure out how..
See Image https://drive.google.com/file/d/1V84NWs ... sp=sharing

Step One. Transfer £10 from CurrentAccount1 to CurrentAccount2
Again, see image https://drive.google.com/open?id=1iMHnE ... Xbds8MkVcQ
The result is as I would expect. CurrentAccount1 goes down to £90 & CurrentAccount2 goes up by £10.

Step Two (and this is my problem). Transfer £10 from CurrentAccount2 (or 1, it makes no difference) to CC_Account1.
See image https://drive.google.com/open?id=1r7LET ... eqOhiZ4hVa
Showing £10 leaving CurrentAccount2. So far, so good. But now look at the Credit Card account...
See image https://drive.google.com/open?id=11MYto ... nRNFIcLHY2

Why is it showing a balance of minus £10 (-£10)?

What leap of understanding do I need to make to see the logic in KMyMoney Credit Card" accounts?

Best regards, Martin
PS - Hope the images work for you....


Thanks for the images, they were helpful.

It does seem odd, but there's a perfectly logical answer. What your looking at is a credit in the Credit Card Account. If you were to make a £10 purchase from that account the balance would be zero.
mprowe
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Hmmmm.....

I'm not so sure. See this image... https://drive.google.com/open?id=1Vo3hy ... 4L_yuOMV_i

I have made (I think?) a £10 purchase from Amazon with a category "testing" using this Credit Card and I now owe the Credit Card company £20?
Surely, if I have made a £10 deposit into my credit card account and then purchased a widget from Amazon, I should be out of debt now?

Regards, Martin
rblackwell
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mprowe wrote:Hmmmm.....

I'm not so sure. See this image... https://drive.google.com/open?id=1Vo3hy ... 4L_yuOMV_i

I have made (I think?) a £10 purchase from Amazon with a category "testing" using this Credit Card and I now owe the Credit Card company £20?
Surely, if I have made a £10 deposit into my credit card account and then purchased a widget from Amazon, I should be out of debt now?

Regards, Martin


That's because you've entered the Amazon purchase as a credit (Payment), not a debit (Charge). Edit the Amazon entry and make sure its entered as a chrage.
mprowe
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Ahhhh.......! Terminology again!!

In real life, I would PAY Amazon using my Credit Card, so I therefore assumed that "Payment" was TO a payee. Not the reverse.

So is there a reason for these terms? In the Current Accounts the transactions are either "Deposit" or Withdrawal (ignoring Transfers) from the point of view of the open account.
But in the Credit Card accounts the terms are "Payment" or "Charge". With "Payment" meaning Payment FROM a payee into the account and "Charge" meaning a charge against the credit card in favour of a payee.

Have I got that right?

Regards, Martin
rblackwell
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mprowe wrote:Ahhhh.......! Terminology again!!

In real life, I would PAY Amazon using my Credit Card, so I therefore assumed that "Payment" was TO a payee. Not the reverse.

So is there a reason for these terms? In the Current Accounts the transactions are either "Deposit" or Withdrawal (ignoring Transfers) from the point of view of the open account.
But in the Credit Card accounts the terms are "Payment" or "Charge". With "Payment" meaning Payment FROM a payee into the account and "Charge" meaning a charge against the credit card in favour of a payee.

Have I got that right?

Regards, Martin


Almost right!

I wouldn't consider it "Payment" FROM a payee but rather a payment you make from one of your Asset accounts. Such payment is usually entered in the form of a transfer from the Asset account to the Credit Card account.

Robert
mprowe
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rblackwell wrote:I wouldn't consider it "Payment" FROM a payee but rather a payment you make from one of your Asset accounts. Such payment is usually entered in the form of a transfer from the Asset account to the Credit Card account.

Robert


Hi Robert,

Thank you for your patience and I'm sorry to prolong the conversation, but this is bugging me. Not the software. But my inability to understand!
To take your last point first. I agree - If I want to pay off my Credit Card debt at the end of the month, irrespective of how I do it in the real world (direct debit, standing order or bank transfer etc), I will make a transfer from one of my Current (Asset) accounts to my Credit Card (Liability) accounts.

But all of my real world payees (Amazon, Tesco, ANO Retailer etc) are not reflected as an Asset Account in my personal finance software.
However, if I have to enter a transaction like this (see image) to make KMyMoney support my conceptual model of paying a payee, so be it.

https://drive.google.com/open?id=1teJQAKNlP3uLWKtQFp3TEKEHc6tTjgeN

Best regards, Martin
User avatar ipwizard
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Please keep in mind, that KMyMoney reverses the sign of the total for liability accounts. So your total debt will be presented as positive amount. So don't try to make your balance to be -10 but rather make it +10 and things are just fine. Hope that helps.


ipwizard, proud to be a member of the KMyMoney forum since its beginning. :-D
openSuSE Leap 15.1 64bit, KF5
mprowe
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paulorocha
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Dear all,

thanks for this topic, I was facing the same problems, struggling with the software.
I have an additional question about this subject if possible

When I import the file from the bank to fill up the credit card account [ OFX], it comes as a payment, how can i change to balance collum this mass information instead of select each line one by one?

Best regards
sat nam
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Hi everyone

also one other thing that confuses even more:
FIRST
If I start the credit card with -100,00€, then in the account book/ledger this -100,00€ is stated in the column "Payment" (Gutschrift), and not "Charge" (Belasung). At least the balance in ledger is ok and says -100,00€. (for pictures see below)

Background
what i did:
1. in accounts (Konten)
i right-click on my credit card under liabilities(verbindlichkeiten) -> edit account (Konto bearbeiten): a window appears, in the tab "generally" (Allgemein) I then can put in a "starting amount" (Saldo)
picture (Bild): https://drive.google.com/file/d/1lBCIIZ ... sp=sharing

2. A look in ledger (Kontenbuch) shows:
picture (Bild): https://drive.google.com/file/d/1qGxiKK ... sp=sharing

i'm using Ubuntu 16.04.3 LTS
-----

SECOND
But, a positive deposit (Einzahlung/Ausgleichszahlung) of +100,00€ from another account onto my credit card is ALSO stated in the column "Payment" (Gutschrift) <- which I think is right, BUT makes the balance more negative (from -100,00€ to -200,00€ in this case), instead of balancing the balance out to 0,00€..
PS: i re-read your post saying:
ipwizard wrote:Please keep in mind, that KMyMoney reverses the sign of the total for liability accounts. So your total debt will be presented as positive amount. So don't try to make your balance to be -10 but rather make it +10 and things are just fine. Hope that helps.

<- so is is it a bug? why not change it in the code, instead of making everyone change the sign everytime?

"Payment" (Gutschrift) means to me that money gets paid INTO the account, that the money in that account gets more.

 
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