[GNC] Business Income Statement: manipulating Cost of Goods sold

[Adrien Monteleone]

Cost of Goods Sold (COGS) is an Expense account, not Income.

What you are looking for is a different type of Income Statement that 
does not exist in GnuCash. (the basic math is the same, you just are 
looking for a 'Net Sales' figure by moving COGS to the upper part of the 
report. This is merely presentational and does not change the nature of 
COGS being an expense rather than an income account.

Your options are:

1. Write your own report. (not easy, and you'd have to learn Scheme)
2. Manipulate the existing report in a spreadsheet app. (still work, but 
much easier and little-to-no learning curve)

Also, generally, you *do* want inventory accounts because purchases are 
*not* the same as COGS.

Here are some generic transactions:

Acquisition of Inventory
------------------------

Dr. Assets:Inventory
   Cr. Assets:Cash

(or Credit whatever account you used to pay for the inventory)

Sale of Inventory
-----------------

Dr. Assets:Cash
   Cr. Income:Sales

Accounting for COGS
-------------------

Dr. Expenses:COGS
   Cr. Assets:Inventory

(can be a separate transaction if using the Business Features, or all 
together in one with the sale if done manually)

Buy or find a good Accounting 101 book, and be sure to get official 
professional advice.

Regards,
Adrien

On 12/8/23 1:57 PM, Eric Chapman wrote:
> (Note 1: I hope the mailing list presents this with fixed-width 
> characters. If it does not, but sample below of a tax form will not 
> appear as I intended it to.)
> 
> (Note 2: The three attached screenshots might help you understand my 
> question. I hope they are small enough to come through.)
> 
> In GnuCash 5.4 I have a Chart of Accounts / Account Tree that reflects 
> Schedule F of Form 1040 for reporting of farm business.
> 
> I use the business feature "Accounts Payable."
> 
> Here is how part of it looks:
> 
> 1a Sales of purchased livestock and other resale 
> items                            $xxxx.xx <-- my sales of resale items 
> account
> 1b Cost or other basis or purchased livestock or other items reported on 
> line 1a    xxx.xx <-- I have 3 Cost of Goods Sold (COGS) accounts that 
> are to be here (should be income account with debit balance [negative])
> 1c Subtract line 1b from line 1a $xxxx.xx
> 
> My problem:
> 
> In the Chart of Accounts / Account Tree I set up the COGS accounts as 
> "income" accounts. As such, in v. 5.4 the COGS accounts were not on the 
> drop down list of "expenses" to debit when recording purchases. So I 
> changed the tick mark for them and called them expenses. They worked fine.
> 
> But now when I print a report, the COGS accounts are listed down in the 
> expense section of the Income Statement, not up under "1a" as they 
> should be (and as they are "parented" an "begotten" in the Chart of 
> Accounts / Account Tree).
> 
> These are the workarounds I see:
> 
> (1) Change the 3 COGS accounts back to having the "Expense" attribute 
> before printing reports.
> 
> (2) Debit all COGS items into inventory accounts and later make journal 
> entries (transactions) from that inventory account to the COGS accounts. 
> I realize this is normal (maybe desirable, but since I'm using all of 
> those COGS items immediately, I thought I'd save time and not use 
> inventory accounts.
> 
> What I'd like:
> 
> The ability for the accounts called "Expenses" but used for COGS to be 
> debitable when entering "Bills" (invoices issued to me by vendors).
> 
> Are there better ways to do what I want to do, or an option to tweak 
> GnuCash so that I can debit those accounts as I want to?