Business Accounting Question

[Paul Schwartz]

given your suggested setup, you/I would credit the merchandise expense account 
for the $15, debit your checking/bank account for $25, and credit your 
income/donation account for $10.

HTH

Paul




________________________________
From: Mark Phillips <mark at phillipsmarketing.biz>
To: Gnucash Users <gnucash-user at gnucash.org>
Sent: Fri, March 11, 2011 12:06:24 PM
Subject: Business Accounting Question

I have a US non profit corporation that takes in donations for out two
softball teams. I recently had new uniforms printed, as well as t-shirts and
sweatshirts for parents. The uniforms belong to the club (ie are returned
when a play leaves), so I don't allocate the cost of the uniforms against
the individual donations from each parent. However, when I sell a sweatshirt
with our club logo on it to a parent for $25, and the cost is $15, I have to
deduct the cost of the sweatshirt from the parent's donation. I am having a
problem thinking through the flow of transactions/accounts.

Simple example: Purchase a sweatshirt for $15, sell to a parent for $25

1. Pay vendor for sweathsirt
debit club merchandise expense account  $15
credit checking account  $15

2. sell sweatshirt to parent
credit Income/donation account for parent  $25
debit some account?? for cost of sweatshirt  $15

But that is as far as I can go. What account do I debit for the $15 cost of
the sweatshirt? How does that account relate to the club merchandise expense
account?

Thanks,

Mark
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