Split transaction and VAT

[John Whitmore]

On Thu, Oct 22, 2015 at 08:28:58AM -0400, Mike or Penny Novack wrote:
> On 10/21/2015 6:09 PM, John Whitmore wrote:
> >I'll start by saying that I'm easily confused by how finnance is delt with so
> >don't take it badly that I'm struggling with the GnuCash Tutorial document.
> >
> >I've been practicing with GnuCash on my personal finances all year as a
> >prelude to running my own small company. Now I'm at the point where I'm trying
> >to add my first transaction to my company acconts. Now I have to use splits!
> >
> >Say I've been paid 1,230 of which 230 is VAT (Value Added Tax) which at some
> >point has to be paid to the government. All this is coming from Company_A.
> >
> 
> I've said this before. You can't make good use of gnucash (or any
> other application) until you understand the fundamentals of double
> entry bookkeeping. Now maybe the tutorial provided along with
> gnucash is enough for some people to get it. But for others probably
> not. And the blame shouldn't be placed on the gnucash team for
> "inadequate tutorial" because their job is to create the package,
> not teach "bookkeeping 101".

Thanks Michael and I totally agree with you and I was never trying to aportion
blame. I started my email by saying that "I'm easily confused by how finnance
is dealt with". GnuCash is Brilliant and a credit to everybody who cuts code
on it. I'm an Engineer so limited expierence of Bussiness accounts so this is
just me struggling with a learning curve. A learning curve on GnuCash and as
you say a learning curve for actual book keeping.


> 
> I won't repeat what you were doing. I will just describe the
> transaction you say you were trying to enter. First the facts. You
> received a check (or other form of payment) from company A, part of
> which was payment to you for some good or service and part payment
> of the VAT due on this (which you later pay to the government or
> charge against VAT payments you made to suppliers, etc.). So yes
> this is a split, BUT:
> 
> Assets:Current Account     db       1,230
>     Income: From A                                cr        1000
>     Liabilities: Vat owed                         cr           230
> 
> a) I am using the old fashioned debit and credit notation so as not
> to involve the supposedly more user friendly alternatives increase
> and decrease. The latter change their meaning depending if the
> account is normally debit balance vs credit balance.
> 
> b) Until you are experienced entering splits, always start in the
> account with the largest amount. And stick to one sided splits until
> you are very experienced entering splits.
> 
> Michael D Novack, FLMI
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