[balderdash]

Let’s take a simple example I buy a plane ticket on January 1st with my credit card for $100 for a flight on March 15th. I paid my credit card bill on February 15th.

I simplistic view would be I spent $100 on January 1st.

Using double entry accounting I can track what is actually happening in that transaction,

1. I buy the ticket w/credit card (CC lent me $100 for an asset (plane ticket) = (cash +100, liabilities +100, assets +100, cash -100) 2. I pay my credit card bill (cash -100, liabilities -100) 3. I take my flight (+100 expense, -100 net worth)

Steps one and two I have yet to incur an expense, cash is changing hands and the composition of my balance sheet is changing, step three I actually incur an expense. That’s the beauty.