How to record: Product purchased and returned for refund
David Reiser
dbreiser at earthlink.net
Sun Oct 29 23:08:42 EST 2006
On Oct 29, 2006, at 12:51 PM, Nelson Tang wrote:
> On 10/29/06, Grant <emailgrant at gmail.com> wrote:
>>> In the same account. The first would be:
>>>
>>> Checking -> Expense
>>>
>>> The refund would be:
>>>
>>> Expense -> Checking
>>>
>>> (Or Credit Card, or whatever)
>
> This will probably show my ignorance of basic accounting, but if the
> refund happens in another reporting period, like the following month,
> then won't the reports be somehwat confusing? In other words, the
> previous month will show the charge and the following month will show
> the refund. If you didn't know that there was a refund coming for a
> large charge, it would appear that you spent a lot more in the
> previous month. Is ths just to be expected?
>
> --nelson
>
IANAA, but you have a choice of recording things on some sort of
'exact' date (transaction date or posting date at the merchant/credit
card company), or you can back date the refund to keep your reports
less disrupted. If you do backdate something, you still have the
choice of not reconciling the refund transaction until it shows up in
the bill. (Makes _that_ part of the accounting less confusing.)
Dave
--
David Reiser
dbreiser at earthlink.net
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