[GNC] Net Worth Barchart

[Adrien Monteleone]

Liz,

I just ran the chart for myself and indeed, it appears your Liabilities 
are backwards. That is, if you owe money, they should have a Credit 
balance, but yours show as Debit balance. (The *normal* balance of a 
Liability account is Credit, not Debit)

What is your preference setting for Accounts > Reversed Balanced Accounts?

If it is "none" or "Income & Expense" then your Liability accounts will 
show as negative amounts in the Accounts tab if they are a Credit balance.

If it is "Credit accounts" then they will show as positive on the CoA.

If your balances are opposite of that, then your balances are reversed. 
(they are 'contra balances' from what is normally expected)

-----

As to your specific situational question:

I'm not real clear on your SX template. Can you provide it for 
clarification? (no need for amounts, It's just to clear up which splits 
you have as Debits & Credits)

 From what I gather, this is a transaction to record money you pay as 
wages (to yourself or others), the liability for taxes on those wages, 
and super (??) payments. (not sure what that last part is)

I'm not quite understanding why that is all in one transaction. But I'll 
take a guess, maybe my below examples will be roughly correct...



1. Payments of wages by a company to employees would simplistically be 
something like:

Dr. Expenses:Labor
   Cr. Cash



2. A (likely) separate transaction would record payroll tax liability 
such as:

Dr. Expenses:Payroll Taxes
   Cr. Liabilities:Payroll Taxes Due

(arguably, you can put this all in one transaction)



3. Then when you make the actual payment:

Dr. Liabilities:Payroll Taxes Due
   Cr. Cash

Which reduces the previous liability incurred and recorded, by the 
amount of your payment.

You'd repeat that second transaction for any adjustments you are advised 
to make as you note, and then zero it out with another payment. (or 
otherwise your 4th Quarter payment is simply larger)

-----

If the situation is concerning something like a 'self-employed' status 
and you're making quarterly estimated income tax payments, the treatment 
would generally be similar, just different terminology and/or account names.

-----

Now, in the case (which it appears you are dealing with) that you are 
paying that tax liability at the same time as wages are disbursed, the 
treatment is similar save that you can record the payment all at once 
and *maybe* skip the intermediary step of 'Taxes Due' splits:

Dr. Expenses:Labor
Dr. Expenses:Payroll Taxes
   Cr. Cash

You would still record the Liability of Taxes Due when you are provided 
the adjustment you need to make, and then zero it out with the final 
payment.

However, I'd bet good practice would be to record those Liability splits 
regardless, just to show a trail that they were incurred, and then 
covered, thus:

Dr. Expenses:Labor			100
Dr. Liabilities:Payroll Taxes Due	 10
Dr. Expenses:Payroll Taxes		 10
   Cr. Liabilities:Payroll Taxes Due  		 10
   Cr. Cash					110

(the Credit to Cash being equal to the first two Debits and splits 3 & 4 
must be also equal to each other)

*Hopefully* the three middle splits are all equal, but if the Liability 
as estimated is not fully paid for, or overpaid, the Debit to the 'Due' 
account (split #2) would be less or more accordingly.


Regards,
Adrien

p.s.—that's how it would look on paper!

On 12/6/22 12:01 AM, Liz wrote:
> On Tue, 6 Dec 2022 15:40:06 +1100
> Chris Grinton <cgrinton at gmail.com> wrote:
> 
>> The charts suggest that you have *negative* liabilities. That is,
>> while the underlying accounts may have a type of "Liability", the net
>> balance of these accounts is negative, so are effectively an asset.
>>
>> For "normal" positive liabilities, the red bars in the chart would be
>> above the $0 line as per the attached screenshot.
>>
>> Chris
> 
> 
> I accept that there is likely a logical fault in my account setup.
> 
> I'm not sure how or where, certainly when I pay my tax out of the bank
> account my liability for paying tax goes down.
> 
> 
> So at the end of the month I enter a transaction by scheduled
> transaction to list my wages, tax and super payments. That transaction
> results in an increase in my Tax liability account, which when I pay up
> a few weeks later, the liability decreases.
> 
> But what I have done, which I'm sure is my problem, is I haven't got
> the tax payments going to the correct logical place but recursively I
> have hurriedly filed them under tax liabilities.
> So my liabilities in my books are increasing regularly instead of being
> zeroed.
> This payment is the amount which the tax people tell me I'm going to
> pay to account for my company tax. They ask for 4 payments each year,
> and then the accountant sorts out annually what else I have to pay.
> 
> So I think it comes to....
> What are appropriate splits for the prepayment of my company tax? One
> side is tax liabilities, and the other I can't work out.
> No use Michael telling me that I need to decide what I would do on
> paper, I'm lost.