[GNC] corporate profit tax ........... where to put

[Jim DeLaHunt]

Hello, Karl:

This sounds like an accounting question to me, not a GnuCash question?  
How would your account advise you to track these transactions if you 
were using a pen and paper accounting book? You can do it the same way 
in GnuCash.

I am a bit surprised by your statement, "that gnucash has no separate 
Equity account". I see a top-level account "Equity" in my Chart of 
Accounts, and a whole tree of other accounts below it. Also, when I pay 
tax, I involve an account of type Expense for the transaction, e.g. an 
account like
     Expense:My Business:Tax:Income Tax

I understand that accounts of Expense and Income are special cases of 
Equity accounts. But that too is an accounting question, not a GnuCash 
question.

I hope this helps,
     —Jim DeLaHunt

On 2023-05-07 23:37, Karl May wrote:
> Hi,
>
> I am wondering where to put the tax on corporate profit.
>
> My understanding from accounting training is:
>
> 1) As long as not paid it would swap between Equity and Liability, i.e. the
> equity shrinks by the tax amount and the liabilities increase by the tax
> amount.
>
> 2) At pay date it would be an asset-liability decrease, i.e. financial assets
> and liabilities shrink by the tax amount.
>
> Now ......... I understand that gnucash has no separate Equity account, at
> least as long as the books are not closed. So how to book step 1)?
>
> Thanks and best regards
>
> Karl
>
>
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