Thank you very much. On Tue, Apr 9, 2024 at 8:19 PM David Cousens <davidcousen...@gmail.com> wrote:
> Richard > > The general rules in accounting practice are that transactions are > recognised in a business' books as income when they are earned and as > expenses when they are incurred unless affected by other business or > taxation legislation. This is the position for accrual accounting. > > Some smaller businesses are permitted to operate on a cash accounting > basis in many jurisdictions. Usually there is a turnover threshold (or > similar) under which the business can use cash accounting where income > is recognized when received and expenses recognized when payment is > made. This generally simplifies cash flow calculations which gives > small business owner's better management control. > > When is income earned? The usual criteria is completeion of a job or as > defined by a contract where part payments are involved and an invoice > should be issued to the client dated at that time. > > Expenses are generally considered to be incurred at the point where you > enter into a contractual agreement (formal or informal) to purchase > goods or services not when you make actual payment for them. > > These general rules can be overridden by specific legislation and > reporting requirements for your type and scale of business which can > vary considerably with the legal jurisdiction in which the business is > operated and should not be necessarily considered as being applicable > in any given situation. > Specific accounting advice relevant to your jurisdiction should always > be obtained from a qualified/licensed accountant in your jurisdiction. > > David Cousens > > > > On Mon, 2024-04-08 at 17:11 -0500, R Losey wrote: > > Since I first learned about recording transactions, I have always > > dated a > > transaction on the date I wrote the check; similarly, when entering > > credit > > card transactions, I use the date that I actually used the credit > > card. > > > > Recently, however, I was having a discussion with a friend and he > > said that > > he uses the bank or credit card date of entry for all of his > > transactions. > > > > I thought this was strange - probably because it is different from > > the > > method I've used all of my life. Perhaps I am the odd one... or > > perhaps > > it's merely a matter of choice, so I thought I'd bring it up to this > > list > > to see what people think about it. > > > > From (a very brief) research about this topic, perhaps this is the > > difference between cash basis accounting and accrual accounting? > > > > > > After thinking about it for a bit, one issue with using the date that > > the > > transactions occur is the reports, especially if one has repeating > > transactions. For example, if the satellite service bill is paid > > each > > month on the 28th, using my method, I record a transaction on the > > 28th. My > > friend will see it on the 29th or 30th, but if the weekend or holiday > > hits > > just right, it can be the 1st or 2nd before he sees it. In the long > > run > > everything should be the same, but the monthly sub-totals can look > > odd. > > Checks can be even worse... someone may hang onto one for weeks. > > > > I'd appreciate thoughts on the topic. > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > 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. > -- _________________________________ Richard Losey rlo...@gmail.com Micah 6:8 _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org 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.
