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

[Karl May]

Hi.

Thanks a lot for the response.

My misconception comes probably from looking at book keeping and GnuCash 
through continental European eyes.

That is, putting corporate profit tax through an expense account, as suggested 
by John and Jim, while working out in terms transactions if the expense 
account is omitted from profit and loss, is an absolute no-no.

Further, since the company has an initial equity of $1, and equity is reported 
only by closing the books or running a report, having a total negative number 
in equity (in the account frame, not the report) due to a liability:equity 
swap just "hurts the eye".

Cheers

On Tuesday, 9 May 2023 06:20:33 AEST Michael or Penny Novack wrote:
> > 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)?
> 
> Before dealing with the question itself. let's get THIS misconception
> out of the way. I believe the source of the misconception is that
> gnucash provides example "skeleton" books with typical accounts in the
> CoA under asset. liability, equity, income, expense, etc. Except these
> examples don't happen to have sub accounts under equity and that might
> be the source of the misconception that you couldn't have such accounts
> 
> For example, suppose the entity is a partnership with three partners, A,
> B, and C. A contributed $10,000 of the capital, B $5000, and C $5000 of
> "goodwill".
> 
> Then under equity you would have accounts for partner A, Partner B, and
> partner C. Best done not using the initial value wizard but an explicit
> transaction debiting bank $15,000 and goodwill %5000 (goodwill is
> considered an asset of the intangible sort) and crediting partnerA
> $10,000 partnerB $5000 and partnerC %$5000. After this transaction,
> total assets would be $20,000, total liabilities 0, and total equity $20,000
> 
> 
> In other words, gnucash has in your CoA the accounts that YOU choose to
> put there according to your needs. Gnucash doesn't have or not have
> particular accounts except in the sense that example skeletons are
> provided for the use of beginners.
> 
> Michael D Novack
> 
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