Entering a credit

[Derek Atkins]

Hi,

Robert G Palmer Jr <robertpalmerjr at mac.com> writes:

> Yes, you could record as a payment, which is my current work around.   
> I created a "Income:Misc Credits" account and make payments using  
> that as the Income account.  The problem is that this is NOT correct  
> double entry book-keeping.  A payment INCREASES the amount in an  
> INCOME account.  This credit should really DECREASE the amount in the  
> A/R account.

In order to DECREASE (Credit) the amount in A/R that money has to "go"
(Debit) somewhere.  This is double entry, after all.  So yes, it will
decrease (credit) A/R and but it will also decrease (debit) income.
Keep in mind that income is "magic" and it will increase when you
credit it.

> Since my situation is so simple, a payment is acceptable (i.e., even  
> if I were audited, the number of transactions and where they go/come  
>>From is small enough that I wouldn't have a problem).  However, the  
> correct way is a CREDIT which, as I said, DECREASES the amount in the  
> A/R account.  (I'm a bit of a perfectionist and like to do things the  
> "right" way) To be able to use this for a business, it seems that  
> CREDITS are a critical feature (am I wrong?).

You're partly wrong.  But you're partly right.   You're neglecting
the double-entry portion.   You can't just decrease A/R without
touching something else.

> Robert

-derek

> On Jan 12, 2009, at 5:07 AM, Robert Stocks wrote:
>
>> I dont use the business stuff myself but could you not just record
>> this as a payment?
>>
>>
>> 2009/1/12 Robert G Palmer Jr <robertpalmerjr at mac.com>:
>>> Specific example:
>>>
>>> I manage my daughter's soccer team.  Each family owes for club dues
>>> and team fees.  Team fees are an ESTIMATE of how much it will cost to
>>> attend all tournaments for the season.  As I near the end of the
>>> season, I figure out how much it ACTUALLY cost to attend the
>>> tournaments.
>>>
>>> I want to issue a credit for the difference between the ESTIMATE and
>>> the ACTUAL cost.
>>>
>>> Unpost and reposting is not a good option for two reasons:
>>> 1. the family already has a copy of the invoice
>>> 2. the credit will NOT appear in the customer report as a line item -
>>> the change in the customer report consists simply of the invoice
>>> value changing (by the credited amount) so the total owed by the
>>> customer does change, but I want them to see the credit in the
>>> Customer Report.
>>>
>>> I really like the Customer Report because it shows how much each
>>> family is expected to pay AND all payments (and hopefully credits)
>>> they made/received during the season.
>>>
>>> Thanks,
>>> Robert
>>>
>>>
>>> On Jan 11, 2009, at 7:38 PM, Cam Ellison wrote:
>>>
>>>> Robert G Palmer Jr wrote:
>>>>> I think this question may have gotten lost in the middle of the  
>>>>> other
>>>>> questions I asked.
>>>>>
>>>>> How do you enter a credit in GnuCash?
>>>>>
>>>>> If I create an Invoice for a given amount: e.g. $100, and post the
>>>>> invoice
>>>>> Later, for whatever reason, I decide that the customer only owes  
>>>>> $50.
>>>>>
>>>>> How do I enter a $50 credit in such a way that it appears on their
>>>>> Customer Report as a credit?
>>>>>
>>>>>
>>>> If you did not actually issue the invoice to the customer, the
>>>> simplest
>>>> thing is to unpost the invoice and correct it.  If the customer has
>>>> received the original invoice, you could still do this, and send the
>>>> replacement.
>>>>
>>>> If the customer has already paid, that's more complicated.  If this
>>>> is a
>>>> repeat customer, and there is a new invoice, you might unpost the
>>>> original invoice as above, and correct it.  There would then be a
>>>> credit, which should show up on the Customer Report.  I'm
>>>> speculating at
>>>> this, because I rarely run the Customer Report.  The difference  
>>>> should
>>>> show in the total, but only if you unpost and amend the original
>>>> invoice.
>>>>
>>>> HTH
>>>>
>>>> Cam
>>>>
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-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available