Refunds and rebates causing imbalances - where original payment(s) is/are difficult to record

[Maf. King]

On Wed 26 September 12 17:15:00 mjl2009 wrote:
> Hi
> 
> I am a new user.
> 
> I have several problems understanding and allocating rebates and refunds in
> GnuCash.
> 
> Background
> 
> I began tracking my finances in GnuCash this year. I captured my financial
> data starting from 1 July 2011.
> 
> Case 1
> 
> For three years ending in May 2012, I paid monthly amounts for insurance on
> a car that I had actually sold. After I discovered what this regular debit
> from my bank account was, my insurer agreed to refund the total amount of
> these installments.
> 
> I received a large lump sum from the insurer. It is a refund, but I don't
> know how to record it against one of my many, small premium payments (say,
> the last ever one in May 2012) without creating an imbalance.

Expense transactions and accounts can be negative.  a refund can be thought of 
as a "negative expense"  

You had normal expense transactions from bank A and B to expenses:insurance, 
now you have a refund, which still goes between Bank B and Expense:insurance, 
but the money flows the other way, so the sum appears in the opposite column 
in GC than all the previous transactions did.

> 
> Case 2
> 
> I received a rebate from Medicare for aggregated medical expenses. Some of
> these were incurred before 30 June 2011. This rebate amount is listed as an
> imbalance, probably because it is understood by GnuCash at the moment as
> income, or as a rebate from nowhere. I don't know how to record this amount
> as a transaction without creating an imbalance.
> 

I don't understand the intricacies of Medicare (I'm in the UK), but maybe you 
could consider that you were loaning medicare the money (but you paid it to 
your Doctor, not Medicare) and they are repaying that loan.  Perhaps an 
Assets:MedicareRefundDue account, with an appropriate opening balance for the 
sum due from last year?  The refund transaction should bring this asset to 0, 
and increase bank checking (or wherever the money was deposited)

> Case 3
> 
> I followed GnuCash tutorial steps to record a refund for a purchase made on
> credit card. In my case there were two differences to the example given: I
> purchased two items from one retailer as a single direct debit from a bank
> account linked to a debit Visa card. (No problem for me to record.) And, my
> purchase was a partial refund of just one unavailable item. GnuCash seemed
> to want to record the 'missing' half of the refunded purchase amount as an
> imbalance. My kludge fix has been to just delete the 'Imbalance'
> transaction. Is this correct procedure?

Not sure I quite get what you are trying to go with this.  I find that making 
GC show what happened in real life usually works out ok.

step 1. Buy 2 items, single transaction

enter a split txn in GC, Bank to both Expenses:foo and Expenses:widgets  (bank 
balance goes down, both expense totals go up) - split is optional, if both 
items fit the same expense category in your file, then a simple transaction is 
fine.

Step 2. retailer is out of widgets, so gives a refund

enter a txn in GC, between Bank and Expenses:widgets, but the opposite sign to 
the splits above. (bank goes up, expense goes down)


> 
> I'm trying to eliminate the imbalances from these scenarios and understand
> this aspect of GnuCash better.
> 

Imbalance transactions usually are a sign that you have got something wrong 
somewhere in GC, so getting rid of them is a fine idea!

> I appreciate any advice from more experienced users.
> 
> MJL
> 

HTH,
Maf.