[GNC] Why is part of a split registered as "rebate" in the Transfer account?

[R Losey]

So, the funds for shipping was added as a credit ("Rebate", right-hand
column), but it should be a debit ("Expense", left-hand side).

(As a side note, I don't use the formal accounting labels, but I have
learned that the left column is ALWAYS the debit column, and the right
column is ALWAYS  the credit column)... but I still use non-formal labels.
The fact that the numbers don't seem to work out properly when you enter
the data means that something is wrong.

Clearly, the asset entry is correct, as that balance is now zero.

I'm not sure, and perhaps others here can correct me, but it seems that you
need to make the shipping expenses either a reduction in gain or an
expense, but I don't think they can be both. If they can be, then another
account is needed to balance things out.

If you pay the shipping separately, I would recommend two transactions. If
it is one thing, I'd use one transaction.

=== first transaction: the sale ===
1) Assent drops 800 EUR to zero
2) Checking increases by 1214 EUR
3) Gain is 414

=== second transaction ===
1) Checking decreases by the shipping amount 35,49
2) Gain is reduced by 35,49 to 378,51

Alternatively, you could decrease the checking by the shipping amount
(35,49) and increase the shipping expense  by 35,49, but, as you noted,
that leaves the gain incorrectly at 414.

There may be another transaction that would lower the gain to the proper
amount, but (as noted above) I cannot think of what the balancing account
would be.


On Fri, Nov 22, 2024 at 2:11 AM Boniforti Flavio <boniforti.f at gmail.com>
wrote:

> Hi Richard.
>
> Yes, my "Shipping costs" account should be (and it is) an expense account
> - I think this is correct, as it is something I pay for out of my pocket.
> The income is there, you just haven't seen it: "Income:Music Equipment
> Sold EUR"
> My asset (Korg MS-20M account) has gone down to zero (minus 800 Euro). The
> gain ("Income:Music Equipment Sold EUR") is actually 378,51 EUR because
> with the money coming into my checking account (1214 EUR) I also paid the
> shipping costs.
> But maybe I want to "compress" too much into one big split transaction. I
> could just put 414 EUR in my "Income:Music Equipment Sold EUR" account and
> then use money from my checking account to pay for the shipping - but this
> would distort my gain (which in fact is *not* 414 EUR, but it is 378,51
> EUR).
>
> What do you think?
> F.
>
> https://www.instagram.com/boniforti_music
> https://soundcloud.com/boniforti_music
> https://bonny-j.bandcamp.com
>
>
> Am Fr., 22. Nov. 2024 um 03:53 Uhr schrieb R Losey <rlosey at gmail.com>:
>
>> Expense accounts, because they are usually only increased, just have
>> Expenses for debits. The credit is called a "Rebate". I don't know if you
>> meant to make that account an expense account.
>>
>> I don't see an Income anywhere in the list.
>>
>> Your asset should have gone down by 800 EUR, as you did. The gain in this
>> sale is 414 EUR, of which the shipping should be an expense, and the Income
>> will be 1214 minus the shipping cost, right?
>>
>>
>> On Thu, Nov 21, 2024 at 3:53 PM Boniforti Flavio <boniforti.f at gmail.com>
>> wrote:
>>
>>> Hi all.
>>>
>>> I've just sold one of my instruments, for which I already have a
>>> dedicated
>>> account "Assets:Current Assets:Music Equipment EUR:Korg MS-20M".
>>> The opening balance for this item is 800 EUR.
>>> I now sold it and I got 1214 EUR for it. So I entered 1214 in the "Total
>>> Increase" column, with "Transfer" my EUR Checking account. Then I added
>>> splits:
>>> 800 "Total decrease" so that the item's value is 0 (as I sold it, I don't
>>> have anymore its value at home) - Transfer = "Korg MS-20M" account;
>>> 378,51 "Total decrease" (which is the surplus I made) - Transfer =
>>> "Income:Music Equipment Sold EUR"
>>> 35,49 "Total decrease", the price I paid for shipping this item to the
>>> seller - Transfer = "Expenses EUR:Post:Shipping cost of sales"
>>>
>>> Now when I look at the last account listed, I see 35,49 in the "Rebate"
>>> column and the "Expense" column is empty - which in the end results in a
>>> negative total:
>>> [image: image.png]
>>> What am I doing wrong?
>>>
>>> Thanks,
>>> Flavio.
>>>
>>> https://www.instagram.com/boniforti_music
>>> https://soundcloud.com/boniforti_music
>>> https://bonny-j.bandcamp.com
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>>
>>
>> --
>> _________________________________
>> Richard Losey
>> rlosey at gmail.com
>> Micah 6:8
>>
>

-- 
_________________________________
Richard Losey
rlosey at gmail.com
Micah 6:8