Uh ---- let's for the moment forget the multiple currencies.
Rather than that, let's examine basic accounting as applied to "sales"
<<from some inventory of goods>>
You would have an account of type assets for inventory << might or might
not have sub accounts for individual items in a case like yours,
particularly, as I recall, you might have expenses refurbishing
instrument --- would be a debit to basis and a credit to "refurbishing
expense >>
You would have an income account "sales" and an expense account "cost of
gods sold.
Lets say you acquire a flute for 20 ducats and spend 2 ducats getting it
refurbished. So you had two transactions, debit flute and credit cash 10
ducats and debit flute credit refurbishing expenses 2 ducats.
Later you sell the flute for 11 ducats << you had a loss >> You debit
cash and credit sales 11 ducats and at the same time debit cost of goods
sold and flute 12 ducats .
IF those were the only income and expense accounts you had and this was
the only business you had during the period and you ran an "Income
Statement" (aka "Profit and Loss") that report would indeed show you the
loss << you had income of 11 ducats but expenses of 12 ducats so lost a
ducat >>
Michael D Novack
PS --- you want to understand not only that you had a loss but why <<
did you pay too much to acquire the object, too much to refurbish it for
sale, etc. >>
On 6/16/2025 3:46 PM, Boniforti Flavio wrote:
Hi Richard and thanks for replying.
I do already have a "Income:Music Equipment Sales CHF" account, but perhaps
I don't think it's correct to add a "decrease" in that account of CHF 32.-
(which is the loss I suffered). Probably it's a matter of perspective... I
could create a separate "Expenses:Music Equipment Sales Loss CHF" and put
that amount in there? But in the latter case, it would be a positive
number, whereas I think it really is a negative number (loss) - and
therefore it would still be the best thing to put it in the "Income:Music
Equipment Sales CHF" as a negative entry?!
TIA,
F.
https://www.instagram.com/boniforti_music
https://soundcloud.com/boniforti_music
https://bonny-j.bandcamp.com
Am Mo., 16. Juni 2025 um 19:23 Uhr schrieb R Losey <[email protected]>:
On Mon, Jun 16, 2025 at 6:00 AM Boniforti Flavio <[email protected]>
wrote:
Hi all.
I've got a collection of (vintage) music instruments - I have an account
for each item, where I put the money I've spent to buy such items. Each
item is a sub-account of a super-account "Instrument collection" - and I
got 2 of them: one in CHF and the other in EUR.
I've also got different bank accounts for CHF and EUR of course.
Let's pick this example, where I'm struggling to put the numbers in the
correct accounts:
- Item ABC, sub-account of the CHF "instrument collection", bought for CHF
79.- (which I've entered as "opening balance");
- selling this item in EUR, therefore I've received money to increase my
EUR checking account;
- no shipping costs involved this time (the intermediary took 57 Euros
from
the buyer and sent me 50 Euros, the other 7 Euros were already used by the
intermediary to buy and send me a shipping label).
Now the question is: how should I correctly enter all the different
transactions? My approach would've been:
- increase my EUR checking account of 50 Euros - the corresponding account
would be "item ABC";
- at this point the account "item ABC" still shows a positive value -
which
cannot be true as I've sold it, so it's not anymore in my possession. How
do I register this loss?
I remember your post from last year; I'm only going to attempt an answer
to the first case in this email.
I assume that item ABC, purchased in CHF is listed in CHF. When you sold
it, presumably it lowered the item ABC balance. However, because you sold
in EUR, how did you mark that in item ABC? Did you convert EUR to CHF for
the date of the sale, and then use that number?
(Assuming that you converted EUR to CHF), you'll want to move the
remaining balance to either an Income account called something like
"Instrument Gain" or an Expense account called "Instrument Loss".
Personally, I favor the Income account, os I would think that it would be
more usual to sell the instruments for gain. Of course, you could have one
of each and put the gains in one and the losses in another. (If I were
doing it, I'd have a single Income account; however, you might need one in
CHF and one in EUR, if instruments have been purchased under both
currencies).
So, using your numbers above (and looking up current exchange rates and
simplifying for example), I'd enter
Increase EUR checking by 50 EUR
Decrease Item ABC by 47 CHF [about what 50 EUR is - you should use
the real value; I'm using this for the example]
Decrease item ABC by 32 CHF [the remaining value]
Record a loss (decrease, I Think) in the Income account "Instrument
Gain" by 32 CHF
That should leave you with zero value for item ABC (which you could now
"hide" the account so you don't see it).
Note that you could merely enter ONE entry into item ABC, decreasing by 79
(the total value), but I did the above in two entries to (hopefully) make
it clearer.
I seem to remember from your earlier post that you are not concerned with
tax consequences of the sale, so I that didn't influence my thinking.
I hope this helps you.
--
_________________________________
Richard Losey
[email protected]
Micah 6:8
_______________________________________________
gnucash-user mailing list
[email protected]
To update your subscription preferences or to unsubscribe:
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.
--
There is no possibility of social justice on a dead planet except the equality
of the grave.
_______________________________________________
gnucash-user mailing list
[email protected]
To update your subscription preferences or to unsubscribe:
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.
