David, So if I add an entry in bad debt for
$500 from expense, transfer from assets:accounts receiveable can I "assign" it to the specific invoice, or no? On Sun, 2021-03-07 at 19:16 -0600, Daffy Duck wrote: > David, > > Thank you. I realized what was happening from an accounting > perspective, but I was wondering if I can do anything that addresses > the reference in due invoices reminder? > > On Sun, 2021-03-07 at 16:53 -0600, David Cousens wrote: > > There is no need to zero out the invoice. It remains as it > > originally was and > > the debt remains on the books. What the debt write off does is > > correct your > > income for the amount of income you expected to but didn't receive > > and > > adjusts the accounts receivable to reflect that you do not expect > > to receive > > that income. > > > > If you cancel out the invoice and at some future time the client > > coughs up > > the money, you will have no way of accounting for how that money > > was > > received but a simple adjustment allows you to reverse the bad debt > > write > > off and then record the payment against the original invoice. > > > > When you make a payment against an invoice normally, you do not > > change the > > amount of the invoice, itself but you increase the amount of an > > asset(bank > > account) and decrease the amount of the Accounts receivable (also > > an asset ) > > by the same amount. > > > > The invoice creates an increase in an income account and an > > increase in the > > Accounts receivable when it is posted to you accounts. In the case > > of a bad > > debt you do not adjust the income but an expense account which has > > the same > > effect on your profit. Expense accounts can be regarded as contra > > income > > accounts. > > > > This way your accounts contain a record of the events as they > > affected your > > finances at the time the events occurred. If they are annotated > > well enough > > anyone can reconstruct the sequence of events as recorded > > > > David Cousens > > > > > > > > ----- > > David Cousens > > -- > > Sent from: > > http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html > > _______________________________________________ > > gnucash-user mailing list > > gnucash-user@gnucash.org > > To update your subscription preferences or to unsubscribe: > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > If you are using Nabble or Gmane, please see > > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > > ----- > > Please remember to CC this list on all your replies. > > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.