If we have a business keeping records with this model, expenses go from our wealth containers into the business and business income goes from the business into our wealth containers. Business accounts are one kind of account that is likely to regularly have transactions in both directions. Consider the following business records:
| Date | Description | Value | From | To |
|---|---|---|---|---|
| 2017-06-02 | Bought materials | $1000 | checking account | business |
| 2017-06-04 | Rent on warehouse space | $1500 | checking account | business |
| 2017-06-05 | Customer 1 - small sale | $200 | business | checking account |
| 2017-06-06 | Electric bill - warehouse | $450 | credit card | business |
| 2017-06-12 | Customer 2 - big sale | $3000 | business | checking account |
If we look at the business account, if we are making money, more money will leave the business (and go to our bank account) than will enter the business (in the form of expenses we pay for).
| Business | |||
|---|---|---|---|
| 2017-06-02 | Bought materials | $1000 | |
| 2017-06-04 | Rent on warehouse space | $1500 | |
| 2017-06-05 | Customer 1 - small sale | -$200 | |
| 2017-06-06 | Electric bill - warehouse | $450 | |
| 2017-06-12 | Customer 2 - big sale | -$3000 | |
| Total | -$250 |
When you lend or borrow money and expect the account to be ongoing for multiple years, you should designate a separate account. For example, I lend money to my employer all the time on a short term basis because I put company expenses on my credit card (and I am reimbursed 10-60 days later). In accounting this is handled as follows:
| Date | Description | Value | From | To |
|---|---|---|---|---|
| 2015-06-01 | Bought employer supplies 1 | $250 | credit card | emp-loan |
| 2015-06-03 | Bought employer supplies 2 | $140 | credit card | emp-loan |
| 2015-06-10 | Bought employer supplies 3 | $530 | credit card | emp-loan |
| 2015-06-20 | Bought employer supplies 4 | $260 | credit card | emp-loan |
| 2015-06-20 | Employer reimbursement | $1180 | emp-loan | checking account |
When we compute the balance on the employer loan account (a wealth container), we see exactly what is owed.
| Employer Loans | |||
|---|---|---|---|
| 2015-06-01 | Bought employer supplies 1 | $250 | |
| 2015-06-03 | Bought employer supplies 2 | $140 | |
| 2015-06-10 | Bought employer supplies 3 | $530 | |
| 2015-06-20 | Bought employer supplies 4 | $260 | |
| 2015-06-20 | Employer reimbursement | -$1180 | |
| Total | $0 |