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

Boniforti Flavio boniforti.f at gmail.com
Mon Nov 25 12:36:08 EST 2024 

Hi Richard.

Why should my "Shipping costs" account have a "rebate" value of 50 (using
your numbers)? I don't think it should be a rebate: instead it looks to me
that it should be an expense. The "shipping costs" account is an expense
type of account, therefore I think that I spent 50 Euros for shipping and
this has to increase the "shipping costs". With a rebate, it decreases
them...

F.

https://www.instagram.com/boniforti_music
https://soundcloud.com/boniforti_music
https://bonny-j.bandcamp.com


Am Sa., 23. Nov. 2024 um 14:48 Uhr schrieb R Losey <rlosey at gmail.com>:

> Ah, well, that makes it simpler. How about something like the following?
> (I'm going to make up numbers instead of using yours).
>
> Your instrument: 800
> Sold for 1000
> Shipping is 50
> Thus, buyer sends you a check for 1050
> You write a check for 50 to SHIPPER to pay for shipping
>
> I would enter these as two transactions - the sale and the shipping
> payment.
>
> Transaction 1:
> Increase the bank account by 1050 (a "Deposit")
> decrease your instrument value by 800
> your income from the sale increases by 200
> the remaining 50 should go into shipping expenses (as a "Rebate")
>
> Transaction 2:
> Decrease the bank account by 50
> Shipping expense should have an Expense of 50
>
>
> Because the buyer is paying shipping, you don't really have any shipping
> expenses, but the way above, everything is recorded for future reference,
> if need be. The shipping expense account will show both an increase of 50
> that the buyer paid in, and the decrease when the shipping was paid.
>
> How does that sound?
>
>
>
> On Sat, Nov 23, 2024 at 6:59 AM Boniforti Flavio <boniforti.f at gmail.com>
> wrote:
>
>> Hi Richard.
>> It's one payment I got from the buyer, which includes both the value of
>> the goods and the shipping costs.
>> F.
>>
>> https://www.instagram.com/boniforti_music
>> https://soundcloud.com/boniforti_music
>> https://bonny-j.bandcamp.com
>>
>>
>> Am Fr., 22. Nov. 2024 um 18:10 Uhr schrieb R Losey <rlosey at gmail.com>:
>>
>>> Hi. Your statement that "shipping is... paid by me, but the buyer is
>>> giving me the money for the shipping" is a contradiction. If the buyer is
>>> providing the funds, he is paying the shipping, not you. How you would
>>> record this depends partly on preference and partly how this is done... is
>>> the shipping included in the total sent to you? Is it a separate payment?
>>> If it is part of the same "transaction", I would use one entry, but if he
>>> gives you money at two different times or in two different ways, I would
>>> use two transactions.
>>>
>>>
>>> On Fri, Nov 22, 2024 at 2:15 AM Boniforti Flavio <boniforti.f at gmail.com>
>>> wrote:
>>>
>>>> Hi David.
>>>> Shipping is factually paid by me with my money, but the buyer is giving
>>>> me
>>>> the money for the shipping. So do I understand it right that I could
>>>> separate this sale and just enter two transactions in my checking
>>>> account?
>>>> One would be the shipping costs, the other is the rest from 1214 EUR? I
>>>> then would have two different "sources of money" for both zeroing the
>>>> "Korg
>>>> MS-20M" account and for the "shipping costs of sales" account. Could
>>>> this
>>>> work?
>>>>
>>>> F.
>>>>
>>>> https://www.instagram.com/boniforti_music
>>>> https://soundcloud.com/boniforti_music
>>>> https://bonny-j.bandcamp.com
>>>>
>>>>
>>>> Am Fr., 22. Nov. 2024 um 04:57 Uhr schrieb David Cousens <
>>>> davidcousens49 at gmail.com>:
>>>>
>>>> > It all depends on whether the buyer or seller is paying the shipping
>>>> > costs.
>>>> >
>>>> > If the seller is paying the shipping costs then it is an expense to
>>>> the
>>>> > seller but in this case the shipping costs are not explicitly included
>>>> > in the purchase price and would be paid.
>>>> >
>>>> > For a business this could be recorded as
>>>> >
>>>> >
>>>> > Asset:Mus. Inst.      Cr 800.00
>>>> > Expenses:CoGS         Dr 800.00
>>>> > Asset:Bank Account    Dr 1241.00
>>>> > Income:Sales Mus Inst Cr 1241.00
>>>> >
>>>> > when the funds are received
>>>> >
>>>> > Asset:Bank account   Cr 35.49
>>>> > Expense:Shipping     Dr 35.49
>>>> >
>>>> > when shipping is paid (these could be combined if simultaneous but
>>>> > ideally better to keep the splits with memo annotations)
>>>> >
>>>> > and the nett profit on the sale is 1241-800-35.49 = 405.51
>>>> >
>>>> > If the buyer is paying the shipping costs, then the purchase price
>>>> > should have included the shipping over and above the sale price of the
>>>> > instrument itself and the seller cannot claim the shipping as an
>>>> > expense and part of the money received pays for the shipping.
>>>> >
>>>> > For this case it could be recorded as
>>>> >
>>>> > Asset Bank            Dr 1178.51
>>>> > Asset:Mus. Inst.      Cr 800.00
>>>> > Expenses:CoGS         Dr 800.00
>>>> > Income:Sales          Cr 1178.51
>>>> >
>>>> > Asset:Bank            Dr 35.49
>>>> > Liability:Shipping    Cr 35.49
>>>> >
>>>> > when the funds are received
>>>> >
>>>> > and when the shipping is paid
>>>> >
>>>> > Asset:Bank           Cr 35.49
>>>> > Liability:Shipping   Dr 35.49
>>>> >
>>>> > and in this case the net profit is 1178.51-800 = 478.51
>>>> >
>>>> > Which of these it is appropriate should be clear from the sales
>>>> > invoice.
>>>> >
>>>> > David Cousens
>>>> >
>>>> > On Thu, 2024-11-21 at 20:52 -0600, R Losey wrote:
>>>> > > 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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>>>> >
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>>>
>>>
>>> --
>>> _________________________________
>>> Richard Losey
>>> rlosey at gmail.com
>>> Micah 6:8
>>>
>>
>
> --
> _________________________________
> Richard Losey
> rlosey at gmail.com
> Micah 6:8
>

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