Thank you so much for you response, but this confuses me a bit.
I understand that you use 'Revenue' where I use 'income?
But then, shouldn't it have a negative value, in order for the
balancing amount in cash to increase, instead of decrease?
Further, I'm not really expending anything when I sell 2 salads at $2 each,
so I have no idea where that 'expense' comes from or goes to.
Another problem is that the conversion from cabbage into salad can be
on another day than the sales of the salads. That would complicate your
solution, I'm afraid.
But ok, let's try to go on with your solution.
So we'll introduce your 'expense' and 'revenue', but then in the form of
income,
and on another date than the salads entered the store.
How about:
2018/03/21 farm
; entry of salads produced
income -2 salad
inventory:store 2 salad
2018/03/24 buyer
; Now the salads are produced and in store and need to be sold. Can I
write this as follows?
income -2 salad {= 2 $}
expenses:cost 2 salad
inventory:store -2 salad
cash 2 salad {= 2 $}
In this notation I can understand the *income* from sales (2 salads @ $2)
and the *cash* inflow as a result.
The decrease in *inventory* is also understandable to me, but the '
*expenses:costs*' still feels counter intuitive to me, although it is
clearly associated with that inventory decrease.
Would it be ok this way?
Sorry if things are over-obvious to me, but I'm just an amateur in
accounting, so I'm just swimming around a bit.
On Tuesday, March 20, 2018 at 10:39:49 AM UTC, Klauss Hass wrote:
>
> You have to put the cost of getting that revenue along with the cash
> position.
>
> As such it would be:
>
> Revenue $2
> Expenses:cost:salad 2 salad
> Inventory: plant -2 salad
> Cash
>
> The way it is being done revenue is getting confused with cost
>
> On 20 Mar 2018, at 04:01, Ella Lobatina <[email protected] <javascript:>>
> wrote:
>
> Hi all.
>
> I'll simplify my use case into that of a cabbage farmer who wants to track
> his produce until and including sales.
> I see the harvested produce as income of some commodity (cabbage), want to
> store it somewhere, move it somewhere else, then process it (into salad),
> move the salad to yet another location, then sell it.
>
> So here's my assumption: harvested produce is income, no? (Otherwise,
> where else would it come from?)
> So the harvest looks like:
>
> 2018/03/21 farm
> income -5 cabbage
> inventory:farm 5 cabbage
>
> From the farm they go to the processing plant, where they will be
> transformed into 2 salads:
>
> 2018/03/21 farm
> inventory:farm -5 cabbage
> inventory:plant 2 salad
>
> Note that the cabbages have not received any financial value, because
> there was no attempt to sell them.
> Now I move the salad to the store and sell them there the same day:
>
> 2018/03/21 farm
> inventory:plant -2 salad
> inventory:store 2 salad
>
> 2018/03/21 buyer
> income -2 salad {= $ 2}
> cash
>
> My problem is that the *assets:store* account still contains a positive
> balance of the *salad* commodity, while there is none.
> So according to ledger (not its fault, purely mine, hence this question)
> there is still an inventory of *salad*.
>
> Can anybody help me with this? I'd like the inventory (*assets:store*) to
> be cleaned up after we've got rid of all those cabbages.
> Clearly I need an entry with *assets:store -2 salad* to do this, but I
> can't imagine what to use as the balancing account.
>
> Another problem is that I'm noting a double income here.
>
> Well, I see that I'm still developing the question, so please hang on and
> bear with me:
>
>
> Would a better way maybe be to see the 5 cabbages used in the plant as an
> expense against the previous income at harvest time? As in:
>
> 2018/03/21 farm
> ; harvest
> income -5 cabbage
> inventory:farm 5 cabbage
>
> 2018/03/21 farm
> ; moved to production plant
> inventory:farm -5 cabbage
> inventory:plant 5 cabbage
>
> 2018/03/21 farm
> ; consumed in plant
> expenses 5 cabbage
> inventory:plant -5 cabbage
> ; great, this got rid of the inventory of cabbages which are being
> transformed into salads right now!
>
> 2018/03/21 farm
> ; entry of salads produced
> income -2 salad
> inventory:store 2 salad
>
> 2018/03/21 farm
> ; Now the salads are produced and in store and need to be sold. Can I
> write this as follows?
> inventory:store -2 salad {= 2 $}
> cash 2 salad {= 2 $}
>
> The only problem I have with this is that the income from salad is
> recorded before selling it, but then, they were derived from the income
> during harvest anyway, so maybe that's not a big deal?
> To mitigate this we could probably split the sale into an accounts
> receivable in which the income is accounted as an aggregate asset, and a
> payment part, like
>
> 2018/03/21
> assets:store -2 salad {= 2 $}
> assets:accounts receivable 2 salad {= 2 $}
> ; the sale
> assets:accounts receivable -2 salad {= 2 $}
> assets:cash 2 salad {= 2 $}
> ; the payment
>
> Any ideas?
> Suggestions as to how to do it better? (According to official accounting
> rules?)
>
> Thanks in advance.
>
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