Help with GnuCash! Why is there a “Rebate” column in the Expense account on GnuCash?

[Maf. King]

HI Robby,

Some of my $0.02 are interspersed below.

On Thu 18 October 12 22:53:56 Robby Burns wrote:

> 
> To answer your questions about what I was trying to do, I was simply trying
> to total up all my business expenses--plus itemized deductions on the
> personal side (i.e.- medical)--and then geta total for each sub-category of
> those expenses.
> 
> I was able to send each expense from the checking account into a
> sub-category...but I ran into trouble when i tried to allocate certain
> charges on my charge card to those sub-categories.
> 
> I do not have a separate credit card for business purposes. I have a very
> small entertainment business, and never found it necessary to have one.


OK, I think I see where you are coming from here.  You buy some widgets for 
the business.   If you pay cash, you have a transfer of funds from Wallet -> 
Expenses:widgets.  Similarly, if you pay by check you'd have a transfer from 
Checking -> Expenses:Widgets.  Paying by credit card is no different, the 
transfer starts in Liabilities:CreditCard, but still ends up in 
Expenses:Widgets.

The expenses:widgets account shows how much you have spent on widgets,  other 
expense accounts show the total spent on other categories of things, bank 
accounts shoh you ha=ow much money you have left.

I find it easier to enter transactions from the "Bank" side rather than the 
category account side, as it is conceptually easier for me.

> 
> So, when I tried to itemize my credit card charges for 2011, I tried to
> create an "account" titled "Credit Card Business Charges"...and then dump
> each line item into the already established sub-categories from my business
> checking account.

I think you are thinking about this kinda wrong.  It is all about recording 
the flow of money in GC.  

Once you have bought the 
widgets on the credit card, you owe that money to the issuing bank.  When you 
pay the card bill, you don't buy (more) widgets.  the transfer is simply from 
checking to the liability:credit card account - hopefully bringing the total 
you owe to the issuer to zero.  The act of paying off a card bill doesn't 
involve touching an expense account (category)  - your checking account 
doesn't "know" what you bought, just that you paid a card bill of £x

You may consider setting up two expense category trees, something like 
Expenses:personal:<list of relevant category accounts>  and
Expenses:business:<different list of category accounts>  (you can have the 
same name in the final sub-account name, eg InterestPaid, but they will remain 
two separate sub-category accounts).  This would make reporting total business 
expenditure somewhat easier in the long run.

If you want to imagine that you have 2 credit cards, one for business and one 
for personal, you can do that too - set the business charge card as a sub-
account of the credit card, and when a statement comes in for reconciling 
make sure you enable the "reconcile subaccounts" option - but IMHO that would 
be an easy way to exceed a card limit!

> 
> That is where I ran into the "Rebate" header. Mike, you told me,* "Don't
> say anything about "rebate" or anything else you see strange about double
> entry bookkeeping."*
> 
> How can I *avoid* saying anything about "rebate" if *that* is the issue I
> find to be confusing?

The rebate column in an expense account should be empty, unless you had to 
return some widgets and the supplier gave you some money back.  (negative 
expense is not equal to income!)   

Maybe you have the type of the account set wrongly?  The column headings do 
vary by account type. On the accounts tree tab, select an account, then click  
Edit and there is a "Type" drop down.  Credit Cards should be type "Credit 
Card", the expense category accounts should by type "expense"

Credit card column headings are Payment and Charge, rather than Expense and 
rebate.  But regardless of what it is called, both columns have to be there in 
GC.  You might be able to shrink it to 0 width, but then you will find it 
harder to pick up on a mistake in data entry...

> 
> I wound up using Quicken 2000 (12 years old) and it was very easy to create
> a "Business Credit Card Charges" account...and to subdivide all the charges
> into different categories.
> 

I honestly think that GC can do the same, but the double-entry rules that GC 
enforces requires a way of thinking which may not be obvious at times!  I 
haven't used a quicken version since IIRC V4 for Win3.1, so can't comment on 
the similarities and differences!


HTH,
Maf.