"Double Dating" transactions?

[David Harrison]

----- Original Message ----- 
From: "Bill Wisse" <wiswp at niue.nu>
To: <gnucash-user at gnucash.org>
Sent: Wednesday, September 01, 2004 4:28 PM
Subject: Re: "Double Dating" transactions?


> On Wednesday 01 September 2004 06:44, David Harrison wrote:
>
>> >  Thomas John Vitolo wrote:
>> > Good sirs and madams:
>> >
>> > >  Is it possible to "double date" a transaction?
>> > >
>> > > Not that I know of.
>> > > I have found that when I feel the need to  "double date" a 
>> > > transaction,
>> > > what I really want to do is do two transactions.  That is take that
>> > > money out of one account and put it in another account on the first
>> > > date, and then take it out of that account and put it into a third on
>> > > the second date.
>> > >
>> > > As an example, you may want to take money out of income and put it 
>> > > into
>> > > a taxes paid account on one date (to get the tax paid in the right
>> > > year) and then when you get that rebate, it would come come
>> >
>> >  All in all it is an interesting question and we really haven't seen 
>> > any
>> > straight forward solution.
>> > Are there no accountants on this list to give us an answer? :-)
>>
>> Hopefully, I can provide a straight forward answer.  You are absolutely
>> right that what you want to do is make (at least) two separate entries.
>> If I remember the original question, it was in regards to income taxes
>> payable. Here are some assumptions that I will make in order to
>> illustrate how to deal with it:
>>
>> 1. Year end is December 31, 2003
>> 2. Instalments were paid during the year.  For simplicity, I'll assume
>> one instalment on June 30, 2003 of $1,000.00
>> 3. Taxes payable for the year were only $900.00, resulting in a refund
>> of $100.00
>> 4. Refund was received May 15, 2004
>
> Thanks for that.
>
> In my case it is withholding tax.
> At the end of the month I receive and bank my cheque as follows: (using 
> your
> $1000.00 example):
> Bank                                       $900.00  (D)
> Expenses: Withholding tax     $100.00  (D)
> Accounts Receivable                                      $1000.00  (C)
>
> This goes on for 12 months, I put in my tax return, I have to pay or get 
> some
> back.

This sounds like your talking about income tax deducted from your paycheque. 
If this is the case, I would still accumulate the monthly payments in the 
income tax payable account the same as in the example I posted earlier.  The 
payable account is really a receivable, but it's one of those accounts that 
can "flip" back and forth on the balance sheet..

If you are posting to the expense account to reflect the cash outflow, you 
are treating the income statement as more of a cash flow statement. 
Technically not correct, but if your not using the income statement for a 
tax return, there is no need to conform to GAAP (generally accepted 
accounting principles), so you can do whatever you want - like you really 
needed my approval ;)

Again, my disclaimer is that I work under Canadian rules, so the rules in 
your country may differ.

>
>
>> Here are the entries that I would make:
>>
>> June 30, 2003
>> Income taxes payable       $ 1,000.00 (debit)
>>    Bank                                  $1,000.00 (credit)
>>
>> December 31, 2003
>> Income tax expense         $   900.00 (debit)
>>    Income tax payable                    $   900.00 (credit)
>>
>> May 15, 2004
>> Bank                       $   100.00 (debit)
>>    Income tax payable                    $   100.00 (credit)
>
> I think this last one is what the OP meant.
> It shows up in the current financial year and not in the year it applies 
> to.

My entries would cause the expense to be recorded in 2003, and the refund 
being recorded in 2004.  The balances would be as follows

Dec 31, 2003
Bank would show $1,000.00 paid
Income taxes payable $ 100.00 (debit balance) - technically a receivable
Income tax expense    $ 900.00 (debit balance)

May 15, 2004
Bank would show $100.00 received
Income taxes payable $ 0.00
Income tax expense    $ 0.00 (as the balance would have closed to retained 
earnings)

I hope I haven't confused things more :)
>
>
> Remember:"Love is Hate. War is Peace. Windows is Stable."
> -- Anonymous
>
> Greetings from
> /bill at 169 west , 19 south.
> Disclaimer: Any errors in spelling, tact, or fact are
> transmission errors."
>
>
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David