How to set up credit card returns

[Bob Plantz]

On 2/1/2012 1:38 AM, Maf. King wrote:
> On Tuesday 31 Jan 2012 23:00:17 dad wrote:
>>      I am new to gnu cash program.  Have been able to figure out how to use
>> the program.  My question: When you make a credit card transaction and
>> record it.  Then you return the item you used the credit card on.  What do
>> you enter in the transfer column for the credit card liability return?  Do
>> you have to make a new account for this type of transaction?   Here is
>> what I tried.  Made a new account under expense titled expense return.  It
>> show up in red. In real time the credit card is a liability  and when I
>> pay it off that is deductible from my assists.  But when I make a charge
>> to the card and then get a return to the card.  It is not an assist and
>> really no money has exchanged for my accounts until I send in  payment.
>> Plus it should not add to my income as it was really not spent from my
>> income.  Thereby not effecting my total worth.  Need suggestions as I have
>> no accounting training. Thank you for your time and consideration.
>>
>
> Hi Don,
>
> I record the transaction as a "negative expense".  so for example, I buy some
> clothes which cost £50, but then try on one of the shirts at home and find a
> fault - eg missing buttons, and decide to return it to the shop who refund me
> £20.
>
> I spend £50 on card and transfer to expense:clothes
> I get a refund of £20 to the card, and transfer from expenses:clothes.
>
> Total in expense:clothes £30, (as in real life)
>
> This is for personal accounting in the UK, your local tax rules may proscribe
> something different, especially for businesses. IANAA!
>
> HTH,
> Maf.
>
I do precisely the same thing. And when I issue a check to the credit 
card company, the payment comes from my checking account, an asset. My 
checking account has the money from an income account. So the flow is:
1. Earn money -> Income:Employer:Income balances with 
Asset:CheckingAccount:Receive
2. Buy two shirts -> Liability:CreditCard:Charge balances with 
Expense:Clothing:Expense
3. Return one shirt -> Liability:CreditCard:Payment balances with 
Expense:Clothing:Rebate
4. Spend money -> Asset:CheckingAccount:Spend balances with 
Liability:CreditCard:Payment

--Bob