Business Accounting Question

[Mark Phillips]

Ok, but how do I handle the check I paid to the merchant for the sweatshirt?

At time of purchase:
debit merchandise expense $15
credit checking $15

At time of sale:
Debit checking $25
credit income $10
credit merchandise expense $15

At the end of the day, my merchandise expense is $0, which does not seem
correct.

I would rather not get into inventory and cogs, if I can avoid it.

What am I missing?

Mark

On Fri, Mar 11, 2011 at 1:46 PM, Paul Schwartz <pmjs1115 at yahoo.com> wrote:

> 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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