Assuming you start it out as: Assets:Cash $600 Liability:Unearned Revenue $-600
Then if you use B over six months you end up with: * $600 in Assets:Cash, which is correct * $600 in Revenue:Serviced Revenue which looks correct intuitively but is not correct, since it should be a negative number * $-1200 in Liability:Unearned Revenue, which is incorrect. The only time money really moved is when you do the initial setup and put the $600 in Assets:Cash. Every six months afterwards, the goal is to get rid of the $-600 in Liability:Unearned Revenue. You can think of Liability:Unearned Revenue as a credit card account and you'd be pretty close to the truth of the matter. The monthly $100 is like a credit card payment. So it comes from Revenue:Serviced Revenue and goes toward paying off the credit card, or in this case, Liability:Unearned Revenue. That's why A works out to $0 in Liability:Unearned Revenue at the end of the six months. If you follow B, that's like putting another $100 charge on the card monthly. On Fri, May 8, 2015 at 10:44 AM, Kev Lau <superinterstel...@gmail.com> wrote: > Dear John, > Thanks for your feedback. I meant to add a negative value on the bottom > value. > I want to get more feedbacks from people on this group. > Thanks for your input. > > Which is correct:- > > A. > Liability:Unearned Revenue $100 > Revenue:Serviced Revenue $-100 > > B. > Revenue:Serviced Revenue $100 ;this is where the money goes to > Liability:Unearned Revenue $-100 ; this is where the money is from > > Please advise if I am thinking correctly. > > > > > On Friday, May 8, 2015 at 9:14:38 PM UTC+7, John West wrote: >> >> There may be a significant gap in how I, as a total amateur, would do >> this versus someone familiar with the Generally Accepted Accounting >> Principals. >> >> In ledger, I might represent the system like this at the start: >> >> Assets:Cash $600 >> Liability:Unearned Revenue $-600 >> >> Then, every month: >> >> Liability:Unearned Revenue $100 >> Revenue:Serviced Revenue $-100 >> >> After six months, you'd have $600 in Assets:Cash, $0 in >> Liability:Unearned Revenue, and $-600 in Revenue:Serviced Revenue. >> >> That will maybe look a little strange, but in ledger I expect all of my >> Income or Revenue accounts to be negative numbers. >> >> I hope this helps! It took me a long time to come to grips with this, >> since I too am self-taught. I have the luxury of not doing this for >> business, though, and only doing it to track my personal finances. >> >> On Fri, May 8, 2015 at 4:56 AM, Kev Lau <superint...@gmail.com> wrote: >> >>> Hi Steffan, >>> Yes. You are right. It does seem strange. I have put 1 example below. >>> Please see and advise how would you write this in your ledger. >>> >>> Hi Rick, >>> See below. >>> Thats a chart I am trying to follow >>> >>> Balance Sheet >>> Assets : Cash, Account Recievables, Supplies, Equipments, >>> Cost_of_Goods >>> Liability : Notes Payable, Account Payable, Wage Payable, >>> UnEarnedRevenue >>> Equity : Common Stock, Retained Earnings, >>> Income Statement >>> Revenue : Service Revenue , Investment Revenue >>> Expenses : Wage Expenses, Rent, Depreciation Expenses etc. >>> >>> Example of UnearnedRevenue: >>> So for example the cash advance of 6 months (without making any >>> delivery) he will have a cash reciept of 600 but no revenue. >>> He only earns his revenue (by making delivery) >>> It will be: >>> Assets:Cash $600 but also in his Liability there will be $600 which will >>> be Liability:UnEarnedRevenue $600 >>> Each month he delivers there will be a addition into the Serviced >>> Revenue account. >>> Which will show the income statement to increase by $100 . >>> >>> Wouldnt this entry above look like this in ledger:- >>> >>> Assets:Cash $600 >>> Liability:UnearnedRevenue $600 >>> >>> Or how would you write this into your ledger. I am most likely doing to >>> wrong. >>> >>> >>> >>> On Thursday, May 7, 2015 at 4:52:16 PM UTC+7, Kev Lau wrote: >>> >>>> Hi, >>>> I am still having difficulties with coming up with a proper mean of >>>> using a ledger for my business. I am hoping that someone here could see my >>>> Ledger and tell me if it looks sound. I don't want to make alot of entries >>>> and later realize I have been doing it wrong. I have read some material on >>>> accounting and feel that I understand how to make entries(but not sure how >>>> well I am organized and structured) >>>> >>>> Below is a sample of my hypothetical testing ledger. If you could have >>>> a look and give me some advise/tips I would deeply appreciate it. >>>> >>>> >>>> >>>> #GENERAL_ELECTRIC:ASSETS:CASH:CITIBANK US$-12,998.06 >>>> ;cash recd, debit to cash acct. >>>> #GENERAL_ELECTRIC:LIABILITIES:ACCOUNT_PAYABLE:VENTURE_ENTERPRISE US$ >>>> 12,998.06 >>>> >>>> #GENERAL_ELECTRIC:EXPENSES:BANK:CITBANK:FEES US$-19.35 ;cash paid >>>> out credit to cash acct. >>>> #GENERAL_ELECTRIC:EXPENSES:BANK:CITIBANK:FEES US$-77.41 ;cash paid >>>> out credit to cash acct. >>>> #GENERAL_ELECTRIC:ASSETS:BANK:CASH >>>> >>>> #GENERAL_ELECTRIC:ASSETS:CASH:CITIBANK US$-4,998.06 >>>> #GENERAL_ELECTRIC:LIABILITIES:ACCOUNT_PAYABLE:VENTURE-ENTERPRISE US$ >>>> 4,998.06 >>>> >>>> #GENERAL_ELECTRIC:EXPENSES:BANK:CITIBANK:FEES US$-34.19 >>>> #GENERAL_ELECTRIC:EXPENSES:COST_OF_GOODS_SOLD:TRIA_SOLAR:INV004 >>>> US$-12,000.00 >>>> #GENERAL_ELECTRIC:EXPENSES:BANK:CITIBANK:FEES US$-34.19 >>>> #GENERAL_ELECTRIC:EXPENSES:COST_OF_GOODS_SOLD:DYNO_WORKS:INV004 >>>> US$-3,808.00 >>>> #GENERAL_ELECTRIC:ASSETS:CASH:CITIBANK >>>> >>>> #GENERAL_ELECTRIC:REVENUE:SALES:MICROSOFT:INV004 >>>> US$6,000.00 >>>> #GENERAL_ELECTRIC:ASSETS:RECEIVABLES:INV004 >>>> US$-6,000.00 >>>> >>>> >>>> -- >>> >>> --- >>> You received this message because you are subscribed to the Google >>> Groups "Ledger" group. >>> To unsubscribe from this group and stop receiving emails from it, send >>> an email to ledger-cli+...@googlegroups.com. >>> For more options, visit https://groups.google.com/d/optout. >>> >> >> -- > > --- > You received this message because you are subscribed to the Google Groups > "Ledger" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to ledger-cli+unsubscr...@googlegroups.com. > For more options, visit https://groups.google.com/d/optout. > -- --- You received this message because you are subscribed to the Google Groups "Ledger" group. 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