> On Feb 11, 2018, at 9:57 AM, Robert Heller <hel...@deepsoft.com> wrote: > > At Sun, 11 Feb 2018 15:51:30 +0100 Jeff Abrahamson <j...@p27.eu> wrote: > >> >> On 11/02/18 15:46, Robert Heller wrote: >>> Here is a "practical" application: >>> >>> Lets say you buy a case of tomatoes for $10 -- this would be a transaction >>> from your bank account (for the check you gave the vegetable wholeseller) of >>> $10 to your Assets:vegetables account. (It is not actually an expense!). >>> Then >>> you sell that case of tomatoes for $12. This would be a split transaction: >>> $10 >>> from your Assets:vegetables account and $2 to an income account. The $12 >>> would >>> come from whatever account the $12 was paid into (eg "Cash" if it was a cash >>> transaction). This brings the Assets:vegetables down to zero (you have no >>> vegetables in stock right now). At the end of the year you generate a report >>> showing the Assets:vegetables at the beginning of the year and and the end >>> of >>> the year. The difference is your "cost of goods sold" -- this is what goes >>> on >>> your tax form (actually, the form has your inventory at the beginning of the >>> year, and your inventory at the end of the year, plus whatever you spent to >>> acquire your inventory during the year, at least that is how the 1040C form >>> works and I guess theo 1040F is similar). >> >> Our emails crossed. I see what you mean, but I don't think the tax >> authorities would find that particularly legal here. It would also make >> VAT computations impossible, I think, although we are exempt from VAT. > > If VAT is anything like Sales Tax, the sales transaction would include all of > the pieces as parts of the "split". This is what I do: > > gross cash/payment in => 1) reduce inventory account by the cost of the goods > 2) sales tax on the transaction to the sales tax > account > 3) whatever is left over to an income account (this > will show up on your P&L report) > Be sure #2 posts to a "Liability:Sales Tax Payable" (or VAT Payable) account, and not a tax expense account.
#3 is not correct, and there are two splits missing. You should have this for every sale (I’m assuming cash payment, adjust as needed): Dr. Assets:Current Assets:Cash Dr. Expenses:Cost of Goods Sold Cr. Liability:Sales Tax Payable Cr. Income:Sales Cr. Assets:Current Assets:Inventory The 1st split is the total amount received as payment. The 2nd is your #1 The 3rd is your #2 The 4th is 1st split - 3rd split. (the difference between amount received and the sales tax, that is, the pre-tax sub-total amount of the actual sale) The 5th is the same as 2nd (COGS debit and Inventory credit should balance between themselves, this could be a separate transaction) Dealing with a VAT or an otherwise inclusive tax jurisdiction/rule is a little messier but similar. (depends on the local laws) > Yes, the only real gotcha is that vegatables are not durable goods, so you > have to account for spoilage somehow. Very easy: Expenses:Cost of Goods Sold:Spoilage Either expense these with a credit against inventory as needed/identified (ideally), or periodically with a reconciliation count of inventory. Regards, Adrien > > It is possible to group things: > > Assets:Inventory:Vegetables > Assets:Inventory:Fruits > Assets:Inventory:Handicrafts > Assets:Inventory:Meat > etc. > (And further subdivide -- Assets:Inventory:Vegetables:Tomatoes, > Assets:Inventory:Vegetables:GreenBeans,etc. It would depend on the level of > detailneeded and you can generate reports using the accounts at different > levels, depending on what you need.) > > >> >> Thanks for explaining clearly! >> > > -- > Robert Heller -- 978-544-6933 > Deepwoods Software -- Custom Software Services > http://www.deepsoft.com/ -- Linux Administration Services > hel...@deepsoft.com -- Webhosting Services > > _______________________________________________ > gnucash-user mailing list > firstname.lastname@example.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list email@example.com To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.