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

Boniforti Flavio boniforti.f at gmail.com
Mon Nov 25 15:03:28 EST 2024 

Thanks David - now I understand that bit as well.
F.

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


Am Mo., 25. Nov. 2024 um 20:57 Uhr schrieb David Cousens <
davidcousens49 at gmail.com>:

>
> Flavio,
>
> Even as a private individual you will be subject to at least taxation
> legislation regarding income.  The business legislation may or may not
> apply depending on the level of activity. My wife is an artist,
> formerly making her living from exhibitions and painting sales. We are
> now retired and these days she only occasionally sells paintings mainly
> to close friends - any income earned from that for example is
> reportable, although not necessarily taxed. The devil is in the detail
> here, hence our suggestions about getting professional advice.
>
> David
>
>
>
> On Mon, 2024-11-25 at 18:25 +0100, Boniforti Flavio wrote:
> > Hi David.
> > No taxation and regulations needed here: I'm a private individual,
> > not a business.
> >
> > F.
> > https://www.instagram.com/boniforti_music
> > https://soundcloud.com/boniforti_music
> > https://bonny-j.bandcamp.com
> >
> >
> > Am Fr., 22. Nov. 2024 um 19:58 Uhr schrieb David Cousens
> > <davidcousens49 at gmail.com>:
> > > Boniforti,
> > >
> > > This is where you need an accountant in your jurisdiction. It all
> > > depends on the business legislation and taxation legislation and
> > > often on regulations and past court decisions and on the exact form
> > > of agreement you reached with the buyer and the documentation of
> > > that that you have.
> > >
> > > If your taxation authority has an advisory service you could
> > > contact them for advice about whether you treat shipping as an
> > > expense or liability. If you issued an invoice or receipt to the
> > > buyer which specified the price of the instrument, and the shipping
> > > costs and the total of 1214Eu, then there is a good chance the
> > > shipping costs are effectively considered as being paid by the
> > > buyer, so on receipt of the funds, that creates an obligation on
> > > you to pay for the shipping, i.e. a liability as the funds are only
> > > being passed to the shipper through you, so the second treatment is
> > > most likely to be appropriate but I cannot know for sure.
> > >
> > > Cheers
> > > David
> > >
> > >
> > > On Fri, 2024-11-22 at 09:14 +0100, Boniforti Flavio 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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