Michael brings up a great point. Here’s another traditional accounting term to search for: “allowance for doubtful accounts.”
It usually resides as a sub-account of A/R. It is a contra-account which means it normally has a credit balance. (assets normally have a debit balance) You use the account by balancing it against Bad Debt Expense. Here’s a decent write-up on the subject: https://www.accountingtools.com/articles/2017/5/15/the-allowance-for-doubtful-accounts Regards, Adrien > On Mar 8, 2018, at 7:17 AM, Mike or Penny Novack > <stepbystepf...@dialup4less.com> wrote: > > On 3/8/2018 4:06 AM, Maf. King wrote >>> I cannot look in income:sales to >>> determine how much taxable income I report, because it would include how >>> much I'm owed also. >>> >>> >>> As such, what is the best way to find out how much taxable income I make >>> per year to report on my taxes? >>> >> Hi, >> >> This is the difference between "accruals" accounting and "cash" accounting. >> >> Basically, GC's invoice module uses accruals - the tax is calculated based on >> when you create the invoice, not when you are paid. > This is partially a case of "not a gnucash question" > > Maf. King gave you an answer that partially addresses the "what if my books > are kept accrual but I report taxes on the cash basis?" > > But there is another part of this. As anybody in business knows, SOME of what > you are owed never gets paid. In other words, there needs to be a periodic > adjustment for "bad debt" and/or the loss when outstanding debt is sold to a > collector for less than the face amount. Before asking us "how do I do this > using gnucash?" you need to look up "how this is handled in any accounting > system". Once you understand THAT (what the transactions would be) you might > easily see HOW to enter in gnucash or you ask us at that point. > > I will just give hints (ideas of what terms you might search for) "bad debt" > (generally an expense) "journal transactions" (a term for this sort of > adjustment) > > Michael D Novack > > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.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 gnucash-user@gnucash.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.
