Correct way to handle credits and refunds

[Mike or Penny Novack]

timzak wrote:

>On the occasional time I've had to return a purchase, the amount credited
>seems to appear in my Income section.  Is this correct?
>
No --- a credit for return is a negative expense item (completely of 
partially canceling out an expense). To record it as an income item 
overstates both income and expense.

>
>In a related question, there are times I withdraw cash for no particular
>purpose, but to have "just in case."  I don't necessarily keep track of how
>it is spent and there are times that after it's been in my wallet for weeks,
>I redeposit a portion of it.  Currently, I handle it such:
>
>Expenses:cash
>  
>
Properly speaking this would be a withdrawal from the bank account money 
going into the "petty cash" account, in this case, pocket money. That 
you are choosing not to account for how it gets spent is unrelated. So 
it might go

Petty Cash        100
     Bank Account       100
         Withdraw money to have in pocket
........ (later)
Bank Account    40
Misc. Expenses   60
      Petty cash              100
           Redeposit money remaining in pocket

>When I withdraw, it creates a debit in this account.  When I redeposit, I
>credit it into "Expenses:cash" as well (I enter it as a deposit).  The only
>thing that looks a little funny is when I run a report, it shows
>"Expenses:cash" under Income for the amounts that I've redeposited.
>
>Is there a better way for me to be doing this, or am I doing it correctly?
>
>Thanking you in advance.
>  
>
Folks --- can't we please get some titles of "basic bookkeeping" or 
"basic accounting" references. Doesn't anybody know some good ones.  
BTW, what I was showing here was how the "journal" entries might look -- 
but of course using GnuCash we don't ordinarily ask to see that view.

Michael

-- 
There is no possibility of social justice on a dead planet except the equality of the grave.