To add to this: you should see that you have two transactions, not one: a
purchase and a sale. Each balances. The difference is your profit.
You do not add a transaction for your profit. A report shows it, as the
difference in Income/Revenue minus Expenses for a period. (Income/Revenue =
equivalent terms: some countries tend to use one term, some the other.)
I highly recommend anyone that is a bit hazy with accounting to read all the
lessons of The Beancounter
Tutorial<http://www.dwmbeancounter.com/tutorial/Tutorial.html>,
carefully. You will then clearly understand stuff, like the fact that
transactions in Income/Revenue and Expenses accounts are just subaccounts
for holding this year's Equity/Capital (Accumulated Profit/Loss) items ("Ma
Capital's Kids"). I wish I had read the Beancounter Tutorial 30 years ago.
On Feb 8, 2008 12:45 PM, Trevor J. Christensen <[EMAIL PROTECTED]>
wrote:
> To answer your very first question/email.......Certainly. If you only
> intend on entering transactions via the GL, you need only create the two
> accounts via SYSTEM -> CHART OF ACCOUNTS. I find it easiest to edit an
> existing account (i.e. change the number from 4000 to 4001 and 'save as
> new'. Now you have both accounts 4000 and 4001. If you find you want to
> enter transactions via the AR or AP functionality, you may need/want to
> adjust the check boxes (in the account display) to determine where/when and
> in what menu the accounts show up. I hope this helps.
>
> To answer your next question.....yes the difference (i.e. sales less cost)
> must be accounted for. Here is a typical entry
>
> Account | Debit | Credit | Notes
> =========================================================
> CASH 500 Post sale of bread (or if on account post
> to AR)
> SALES 500
> COGS 400 Post cost of bread sold (or if on account
> post to AP)
> CASH 400
>
> The difference (your profit margin will show up in your income statement
> (until you close it out for year end).
>
> Trevor
>
-------------------------------------------------------------------------
This SF.net email is sponsored by: Microsoft
Defy all challenges. Microsoft(R) Visual Studio 2008.
http://clk.atdmt.com/MRT/go/vse0120000070mrt/direct/01/
_______________________________________________
Ledger-smb-users mailing list
[email protected]
https://lists.sourceforge.net/lists/listinfo/ledger-smb-users
