[GNC] Posting a bad debt

Adrien Monteleone adrien.monteleone at lusfiber.net
Wed Apr 10 14:25:39 EDT 2019


Roger,

That is correct and likely the source of the discrepancy in understanding how to treat bad debts and the meaning of ‘revenue'.

Under accrual accounting, revenue is booked when it is earned, collection is a separate event.

The business features of GnuCash were designed for accrual based accounting.

There is at least one open bug as an RFE to modify them to be useful for cash-basis accounting but I don’t know if anyone has made any effort there.

Regards,
Adrien

> On Apr 10, 2019, at 11:26 AM, <rmomxtx at gmail.com> <rmomxtx at gmail.com> wrote:
> 
> Greg,
> 
> 
> 
> You’re not hijacking the thread. Good question. Whether a bad debt is a simple loss of income or an expense depends on your method of accounting, cash or accrual. If the latter, the sale is counted as income the day you create the invoice. By the former, it isn’t income until it is paid. It is not uncommon to call a bad debt an expense. At least this is my understanding from my experience and what I studied in college. That was back in the late 60’s so what do I know? 😉
> 
> 
> 
> Roger




More information about the gnucash-user mailing list