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

R Losey rlosey at gmail.com
Mon Nov 25 14:19:31 EST 2024 

Well, it's not really a "rebate"; it's called that because, in most cases,
expenses are just expenses, and anything on the other side is a rebate.
However, this is a credit to shipping expenses, because you will then later
have an expense entry to zero it out... after all, since the buyer is
paying shipping costs, your net expenses should be zero.

Don't let the column labels confuse you in this matter.

You DO spend 50 for shipping, but the buyer paid you 50, so your actual
shipping expenses should be zero.  Think if you paid for shipping and THEN
he paid you back -- you'd have a 50 "expense" and then a "rebate" or
"payback" of 50.



On Mon, Nov 25, 2024 at 11:36 AM Boniforti Flavio <boniforti.f at gmail.com>
wrote:

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

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

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