Re: [GNC] Beginner Accounting Question
Patrick, Are you setting up accounts for the business or accounts for your personal finance? I am assuming these are the business acounts. If you purchase itmes for the business are you intending to refund the money to your personal accounts or are you making a contribution to the capital of the business? If you are intending to refund yourself for purchases for the business then you would record that as a Liability in a subaccount suitably labelled (Loans To Business (credit the liability account and debit an appropriate expense account to record the purchase and when you pay yourself back credit the business bank account and debit the Liability sub account). When the business has paid back all money it owes you the Liability sub account balance should be 0. If you are contributing to the business capital with the purchase you would credit an Equity subaccount with a name like Owner's Contributions and debit the appropriate expense account with a suitable annotation in the description/memo field. If the items are major purchases, i.e. capital items which are to be used by the business over more than a single accounting period. You would record it as an asset with the second entry to either the equity or liability account as before and as appropriate. It may then be either depreciated or if it is consummable recorded as an expense as you consume it. Your jurisdiction may hae tax rules which may impact this decision. There is usually a threshold value below which items are normally expensed directly on purchase for example. The usual disclaimer applies that this should not be considered accounting advice and if you are unsure of the rules which may apply in your jurisdiction you should seek professioanl advice from an accountant with experience and accreditation in your jurisdiction. Hope this helps you in getting going with GnuCash David Cousens On Tue, 2021-12-21 at 09:50 +, Patrick Skelton wrote: > Hi, > > I'm steadily 'getting' the double-entry idea. In my accounts (which I have > just begun experimenting with), I have an account that is called 'Personal > Money Used'. This is of type Cash. I use this account when I use my own > personal account (i.e. nothing to do with the business) to buy something > for the business. > > I have two questions about this account: > > 1. What is the correct parent account for this? It feels to me like it is a > Liability - money the business owes me but I suspect liabilities are debts > to external entities (i.e. not me, the business owner). > 2. Would I be better accounting for such purchases simply as money I put > into the business (i.e. as an increase in Owner's Equity)? > > I'm trying hard to get into this but can't afford to pay for professional > lessons so any help at all would be very welcome. > > Kind wishes - Patrick > ___ > 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.
[GNC] Beginner Accounting Question
Hi, I'm steadily 'getting' the double-entry idea. In my accounts (which I have just begun experimenting with), I have an account that is called 'Personal Money Used'. This is of type Cash. I use this account when I use my own personal account (i.e. nothing to do with the business) to buy something for the business. I have two questions about this account: 1. What is the correct parent account for this? It feels to me like it is a Liability - money the business owes me but I suspect liabilities are debts to external entities (i.e. not me, the business owner). 2. Would I be better accounting for such purchases simply as money I put into the business (i.e. as an increase in Owner's Equity)? I'm trying hard to get into this but can't afford to pay for professional lessons so any help at all would be very welcome. Kind wishes - Patrick ___ 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.
Re: [GNC] Beginner Accounting Question Using GnuCash
Perhaps try the Account Report? Open the 'Stock on Hand' account, then Reports > Account Report. You can also try the Transaction Report and choose to report just on your inventory account(s). Regards, Adrien On 12/17/21 5:19 AM, Patrick Skelton wrote: Hi, I am trying to get my head around double-entry accounting. I think I have kind-of got it. I have just set up a stripped down set of accounts and tried a handful of transactions, to see how they affect profit-and-loss and the balance sheet. It all seems to make sense except that there is one piece of information that seems to vanish, and I am worried this means I am doing something wrong. My transactions beginning with all zero balances are: (N*ote:* I have added some dates to give context to my later question) 1. 1st Nov: I pay £100 into the business *Bank* financed by *Owner's Equity*. 2. 2nd Nov: I buy some paper costing £12, which comes from *Bank* and goes into *Stock on Hand*. 3. 3rd Dec: I sell a notepad for £12, which credits *Bank* and is assigned to *Income - Sales*. 4. 4th Dec: I transfer the cost of the paper used to make the notepad (£1.00) from *Stock on Hand* to *Expenses - Cost of Materials*. The Balance Sheet shows £111. Liabilities are zero. Retained Earnings are £11, which gives total equity of £111. Thus the sheet is balanced. My question is that no matter what report I run using whatever dates, I cannot see the £12 I spent on stock. All I ever see is the £1 that I decided was the cost of the paper taken from stock. Even if I do reports only for the month of November, I don't see the £12 I paid for stock because the money came from my bank and went into stock, which are both Asset accounts. Is there a better way to do these transactions so that I could ask the question: how much have I spent on stock this month? I am a complete newbie so would welcome any help or advice (short of 'get an accountant', which I would love to but can't afford). Kind wishes - Patrick ___ 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.
Re: [GNC] Beginner Accounting Question Using GnuCash
Thank you everyone for those replies. They have been extraordinarily helpful. It is amazing how, when asking a question about something specific, a single sentence or even just a phrase in the reply can cause a lightbulb moment. I now have a much clearer understanding of how the basic mechanics of this work. I think next task is to play with some reports, to see if I can answer the questions I might like to ask at the end of the year. - Patrick On Fri, 17 Dec 2021 at 17:41, Michael or Penny Novack < stepbystepf...@comcast.net> wrote: > On 12/17/2021 6:48 AM, Patrick Skelton wrote: > > Hi, David, > > > > Thank you for that. I have actually just kind-of worked that bit out but > I > > would like the £8 spent on paper to become an asset. Is it simply then a > > case of entering a transfer from Expenses-Stock Purchases to Assets - > Stock > > on Hand? > > > > Kind wishes - Patrick > > You were doing it correctly, Patrick. Your example appears to be a > "stationery" business, so you correctly had the purchase of paper go > into an asset "inventory" rather than being an expense. You also did the > sales transaction correctly, recording not just the part with the > customer but the part where you are now decreasing inventory and > recording an expense for the cost of that pad sold. > > Michael D Novack > > > > ___ > 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.
Re: [GNC] Beginner Accounting Question Using GnuCash
On 12/17/2021 6:44 PM, David H wrote: Hi David, Thanks, my bad I was thinking in terms of my personal Gnucash book not realising it was more appropriate to be thinking in terms of business books in Patrick's case. Lesson learned, glad I'm still learning after all this time :-) Not quite. It isn't a personal vs business difference but a difference between what "paper" is for a business buying and selling paper (a stationery business) vs a business buying paper just as "office supplies". On the latter case, would immediately be an expense while in the former, only expensed as inventory depleted. Michael D Novack PS: Not a "capital expense". The stationery business might have those too, say its shelves and counters, etc. Those would be expensed as depreciated. This instead would be under the asset category "inventory". ___ 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.
Re: [GNC] Beginner Accounting Question Using GnuCash
Hi David, Thanks, my bad I was thinking in terms of my personal Gnucash book not realising it was more appropriate to be thinking in terms of business books in Patrick's case. Lesson learned, glad I'm still learning after all this time :-) Cheers David H. On Sat, 18 Dec 2021 at 09:15, wrote: > > > David, > > Patrick's recording is perfectly valid if his purchase of stock is a > capital expense, i.e. it is intended that the asset will be consumed over > more thanone accounting period, and not simply within the current period > in which latter case it is a direct expense expense. > The transaction for the cost of the item sold entory at the time of sale > of an > item produced form stock held as an inventory item is a standard accounting > procedure where capital items are used in the production of items for sale > in > Cost Management Accounting ( there are usually other costs also included > (glue > binmders, overheads etc). > > His problem is that this transaction is not showing up in any report, not > the > validity of the transaction itself. My suspicion is that the account is not > being included in the default account settings for the report. > > David Cousens > > > SalesOn Fri, 2021-12-17 at 21:39 +1000, David H wrote: > > Patrick, > > > > Look carefully at point 2, one side of your transaction should be an > > expense as you are expending funds to buy stock eg Expense >> Stock > > Purchases rather than Stock on Hand ? > > > > Cheers David H > > > > > > > > On Fri, 17 Dec 2021 at 21:20, Patrick Skelton > > wrote: > > > > > Hi, > > > > > > I am trying to get my head around double-entry accounting. I think I > have > > > kind-of got it. I have just set up a stripped down set of accounts and > > > tried a handful of transactions, to see how they affect > profit-and-loss and > > > the balance sheet. It all seems to make sense except that there is one > > > piece of information that seems to vanish, and I am worried this means > I am > > > doing something wrong. > > > > > > My transactions beginning with all zero balances are: > > > > > > (N*ote:* I have added some dates to give context to my later question) > > > > > >1. 1st Nov: I pay £100 into the business *Bank* financed by *Owner's > > >Equity*. > > >2. 2nd Nov: I buy some paper costing £12, which comes from *Bank* > and > > >goes into *Stock on Hand*. > > >3. 3rd Dec: I sell a notepad for £12, which credits *Bank* and is > > >assigned to *Income - Sales*. > > >4. 4th Dec: I transfer the cost of the paper used to make the > notepad > > >(£1.00) from *Stock on Hand* to *Expenses - Cost of Materials*. > > > > > > The Balance Sheet shows £111. Liabilities are zero. Retained Earnings > are > > > £11, which gives total equity of £111. Thus the sheet is balanced. > > > > > > My question is that no matter what report I run using whatever dates, I > > > cannot see the £12 I spent on stock. All I ever see is the £1 that I > > > decided was the cost of the paper taken from stock. > > > > > > Even if I do reports only for the month of November, I don't see the > £12 I > > > paid for stock because the money came from my bank and went into stock, > > > which are both Asset accounts. > > > > > > Is there a better way to do these transactions so that I could ask the > > > question: how much have I spent on stock this month? > > > > > > I am a complete newbie so would welcome any help or advice (short of > 'get > > > an accountant', which I would love to but can't afford). > > > > > > Kind wishes - Patrick > > > ___ > > > 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. > > ___ > 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. >
Re: [GNC] Beginner Accounting Question Using GnuCash
David, Patrick's recording is perfectly valid if his purchase of stock is a capital expense, i.e. it is intended that the asset will be consumed over more thanone accounting period, and not simply within the current period in which latter case it is a direct expense expense. The transaction for the cost of the item sold entory at the time of sale of an item produced form stock held as an inventory item is a standard accounting procedure where capital items are used in the production of items for sale in Cost Management Accounting ( there are usually other costs also included (glue binmders, overheads etc). His problem is that this transaction is not showing up in any report, not the validity of the transaction itself. My suspicion is that the account is not being included in the default account settings for the report. David Cousens SalesOn Fri, 2021-12-17 at 21:39 +1000, David H wrote: > Patrick, > > Look carefully at point 2, one side of your transaction should be an > expense as you are expending funds to buy stock eg Expense >> Stock > Purchases rather than Stock on Hand ? > > Cheers David H > > > > On Fri, 17 Dec 2021 at 21:20, Patrick Skelton > wrote: > > > Hi, > > > > I am trying to get my head around double-entry accounting. I think I have > > kind-of got it. I have just set up a stripped down set of accounts and > > tried a handful of transactions, to see how they affect profit-and-loss and > > the balance sheet. It all seems to make sense except that there is one > > piece of information that seems to vanish, and I am worried this means I am > > doing something wrong. > > > > My transactions beginning with all zero balances are: > > > > (N*ote:* I have added some dates to give context to my later question) > > > >1. 1st Nov: I pay £100 into the business *Bank* financed by *Owner's > >Equity*. > >2. 2nd Nov: I buy some paper costing £12, which comes from *Bank* and > >goes into *Stock on Hand*. > >3. 3rd Dec: I sell a notepad for £12, which credits *Bank* and is > >assigned to *Income - Sales*. > >4. 4th Dec: I transfer the cost of the paper used to make the notepad > >(£1.00) from *Stock on Hand* to *Expenses - Cost of Materials*. > > > > The Balance Sheet shows £111. Liabilities are zero. Retained Earnings are > > £11, which gives total equity of £111. Thus the sheet is balanced. > > > > My question is that no matter what report I run using whatever dates, I > > cannot see the £12 I spent on stock. All I ever see is the £1 that I > > decided was the cost of the paper taken from stock. > > > > Even if I do reports only for the month of November, I don't see the £12 I > > paid for stock because the money came from my bank and went into stock, > > which are both Asset accounts. > > > > Is there a better way to do these transactions so that I could ask the > > question: how much have I spent on stock this month? > > > > I am a complete newbie so would welcome any help or advice (short of 'get > > an accountant', which I would love to but can't afford). > > > > Kind wishes - Patrick > > ___ > > 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. ___ 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.
Re: [GNC] Beginner Accounting Question Using GnuCash
Patrick, You obviously tried the reports. The most general report is the Transactionn report which you can set to view the transactions in any one account or combination of accounts. The trick with reports is when the report comes up its options are set to default values. If you then choose the Edit>>Report options with the report tab open you can set the specific options for the report you require including the specific accounts to display. These can be saved as a custom report and then reused (you may have to alter the date range though) Don't know if this is the problem you are having but it is farily common new user problem with reports David Cousens On Fri, 2021-12-17 at 11:19 +, Patrick Skelton wrote: > Hi, > > I am trying to get my head around double-entry accounting. I think I have > kind-of got it. I have just set up a stripped down set of accounts and > tried a handful of transactions, to see how they affect profit-and-loss and > the balance sheet. It all seems to make sense except that there is one > piece of information that seems to vanish, and I am worried this means I am > doing something wrong. > > My transactions beginning with all zero balances are: > > (N*ote:* I have added some dates to give context to my later question) > >1. 1st Nov: I pay £100 into the business *Bank* financed by *Owner's >Equity*. >2. 2nd Nov: I buy some paper costing £12, which comes from *Bank* and >goes into *Stock on Hand*. >3. 3rd Dec: I sell a notepad for £12, which credits *Bank* and is >assigned to *Income - Sales*. >4. 4th Dec: I transfer the cost of the paper used to make the notepad >(£1.00) from *Stock on Hand* to *Expenses - Cost of Materials*. > > The Balance Sheet shows £111. Liabilities are zero. Retained Earnings are > £11, which gives total equity of £111. Thus the sheet is balanced. > > My question is that no matter what report I run using whatever dates, I > cannot see the £12 I spent on stock. All I ever see is the £1 that I > decided was the cost of the paper taken from stock. > > Even if I do reports only for the month of November, I don't see the £12 I > paid for stock because the money came from my bank and went into stock, > which are both Asset accounts. > > Is there a better way to do these transactions so that I could ask the > question: how much have I spent on stock this month? > > I am a complete newbie so would welcome any help or advice (short of 'get > an accountant', which I would love to but can't afford). > > Kind wishes - Patrick > ___ > 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.
Re: [GNC] Beginner Accounting Question Using GnuCash
You are doing things correctly. Your question " Is there a better way to do these transactions so that I could ask the question: how much have I spent on stock this month?" isn't about what accounts to have or how to enter the transactions (of your little example -- and BTW, that's a good way to learn with a simplified "test" set of books). It's about what reports do I want to run to show what I want to show. You have run the "Income Statement" and "Balance Sheet" but neither of those would show what you want to see. Gnucash has lots of reports and they show different things. So your question should be "what report do I want to run in order to see just the flow into and out of a specific account?" << what report would show me JUST "stock on hand" and its transactions and only that >> We could simply tell you that but at the learning stage you are at it might be better if you just ran some of the other reports to see what they do, which report does what. That's because you are going to have a lot more questions of the sort "what report do I run in order to see...? Michael D Novack On 12/17/2021 6:19 AM, Patrick Skelton wrote: Hi, I am trying to get my head around double-entry accounting. I think I have kind-of got it. I have just set up a stripped down set of accounts and tried a handful of transactions, to see how they affect profit-and-loss and the balance sheet. It all seems to make sense except that there is one piece of information that seems to vanish, and I am worried this means I am doing something wrong. My transactions beginning with all zero balances are: (N*ote:* I have added some dates to give context to my later question) 1. 1st Nov: I pay £100 into the business *Bank* financed by *Owner's Equity*. 2. 2nd Nov: I buy some paper costing £12, which comes from *Bank* and goes into *Stock on Hand*. 3. 3rd Dec: I sell a notepad for £12, which credits *Bank* and is assigned to *Income - Sales*. 4. 4th Dec: I transfer the cost of the paper used to make the notepad (£1.00) from *Stock on Hand* to *Expenses - Cost of Materials*. The Balance Sheet shows £111. Liabilities are zero. Retained Earnings are £11, which gives total equity of £111. Thus the sheet is balanced. My question is that no matter what report I run using whatever dates, I cannot see the £12 I spent on stock. All I ever see is the £1 that I decided was the cost of the paper taken from stock. Even if I do reports only for the month of November, I don't see the £12 I paid for stock because the money came from my bank and went into stock, which are both Asset accounts. Is there a better way to do these transactions so that I could ask the question: how much have I spent on stock this month? I am a complete newbie so would welcome any help or advice (short of 'get an accountant', which I would love to but can't afford). Kind wishes - Patrick ___ 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. -- There is no possibility of social justice on a dead planet except the equality of the grave. ___ 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.
Re: [GNC] Beginner Accounting Question Using GnuCash
On 12/17/2021 6:48 AM, Patrick Skelton wrote: Hi, David, Thank you for that. I have actually just kind-of worked that bit out but I would like the £8 spent on paper to become an asset. Is it simply then a case of entering a transfer from Expenses-Stock Purchases to Assets - Stock on Hand? Kind wishes - Patrick You were doing it correctly, Patrick. Your example appears to be a "stationery" business, so you correctly had the purchase of paper go into an asset "inventory" rather than being an expense. You also did the sales transaction correctly, recording not just the part with the customer but the part where you are now decreasing inventory and recording an expense for the cost of that pad sold. Michael D Novack ___ 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.
Re: [GNC] Beginner Accounting Question Using GnuCash
There are two kinds of expenses - current expenses and capital expenses (specific terms may vary). Capital expenses convert one asset (usually money) to another. Current expenses just deplete an asset (or increase a liability). In the case where you are converting money to inventory of materials from which to make something, and you are treating that inventory as an asset, you don’t actually get to see the expense. The real expense occurs when you deplete the assets by making the first notebook. In the meantime you still have all the paper. Unless the paper drops in value, which would be depreciation or - if it dropped because of fire or water damage, a different sort of expense, the name of which likely depends on where you are. One report that would allow you to see the money move is the cash flow report, which isn’t exactly as its name implies. For that report you select a subset of your accounts and it tells you what moves in and out of the subset, ignoring anything that happens within it. So long as your paper inventory is on one side and the money spent comes from the other, it will show up. > On Dec 17, 2021, at 6:48 AM, Patrick Skelton wrote: > > Hi, David, > > Thank you for that. I have actually just kind-of worked that bit out but I > would like the £8 spent on paper to become an asset. Is it simply then a > case of entering a transfer from Expenses-Stock Purchases to Assets - Stock > on Hand? > > Kind wishes - Patrick > > > > > > > > > > > > On Fri, 17 Dec 2021 at 11:40, David H wrote: > >> Patrick, >> >> Look carefully at point 2, one side of your transaction should be an >> expense as you are expending funds to buy stock eg Expense >> Stock >> Purchases rather than Stock on Hand ? >> >> Cheers David H >> >> >> >> On Fri, 17 Dec 2021 at 21:20, Patrick Skelton >> wrote: >> >>> Hi, >>> >>> I am trying to get my head around double-entry accounting. I think I have >>> kind-of got it. I have just set up a stripped down set of accounts and >>> tried a handful of transactions, to see how they affect profit-and-loss >>> and >>> the balance sheet. It all seems to make sense except that there is one >>> piece of information that seems to vanish, and I am worried this means I >>> am >>> doing something wrong. >>> >>> My transactions beginning with all zero balances are: >>> >>> (N*ote:* I have added some dates to give context to my later question) >>> >>> 1. 1st Nov: I pay £100 into the business *Bank* financed by *Owner's >>> Equity*. >>> 2. 2nd Nov: I buy some paper costing £12, which comes from *Bank* and >>> goes into *Stock on Hand*. >>> 3. 3rd Dec: I sell a notepad for £12, which credits *Bank* and is >>> assigned to *Income - Sales*. >>> 4. 4th Dec: I transfer the cost of the paper used to make the notepad >>> (£1.00) from *Stock on Hand* to *Expenses - Cost of Materials*. >>> >>> The Balance Sheet shows £111. Liabilities are zero. Retained Earnings are >>> £11, which gives total equity of £111. Thus the sheet is balanced. >>> >>> My question is that no matter what report I run using whatever dates, I >>> cannot see the £12 I spent on stock. All I ever see is the £1 that I >>> decided was the cost of the paper taken from stock. >>> >>> Even if I do reports only for the month of November, I don't see the £12 I >>> paid for stock because the money came from my bank and went into stock, >>> which are both Asset accounts. >>> >>> Is there a better way to do these transactions so that I could ask the >>> question: how much have I spent on stock this month? >>> >>> I am a complete newbie so would welcome any help or advice (short of 'get >>> an accountant', which I would love to but can't afford). >>> >>> Kind wishes - Patrick >>> ___ >>> 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. ___ 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
Re: [GNC] Beginner Accounting Question Using GnuCash
Hi, David, Thank you for that. I have actually just kind-of worked that bit out but I would like the £8 spent on paper to become an asset. Is it simply then a case of entering a transfer from Expenses-Stock Purchases to Assets - Stock on Hand? Kind wishes - Patrick On Fri, 17 Dec 2021 at 11:40, David H wrote: > Patrick, > > Look carefully at point 2, one side of your transaction should be an > expense as you are expending funds to buy stock eg Expense >> Stock > Purchases rather than Stock on Hand ? > > Cheers David H > > > > On Fri, 17 Dec 2021 at 21:20, Patrick Skelton > wrote: > >> Hi, >> >> I am trying to get my head around double-entry accounting. I think I have >> kind-of got it. I have just set up a stripped down set of accounts and >> tried a handful of transactions, to see how they affect profit-and-loss >> and >> the balance sheet. It all seems to make sense except that there is one >> piece of information that seems to vanish, and I am worried this means I >> am >> doing something wrong. >> >> My transactions beginning with all zero balances are: >> >> (N*ote:* I have added some dates to give context to my later question) >> >>1. 1st Nov: I pay £100 into the business *Bank* financed by *Owner's >>Equity*. >>2. 2nd Nov: I buy some paper costing £12, which comes from *Bank* and >>goes into *Stock on Hand*. >>3. 3rd Dec: I sell a notepad for £12, which credits *Bank* and is >>assigned to *Income - Sales*. >>4. 4th Dec: I transfer the cost of the paper used to make the notepad >>(£1.00) from *Stock on Hand* to *Expenses - Cost of Materials*. >> >> The Balance Sheet shows £111. Liabilities are zero. Retained Earnings are >> £11, which gives total equity of £111. Thus the sheet is balanced. >> >> My question is that no matter what report I run using whatever dates, I >> cannot see the £12 I spent on stock. All I ever see is the £1 that I >> decided was the cost of the paper taken from stock. >> >> Even if I do reports only for the month of November, I don't see the £12 I >> paid for stock because the money came from my bank and went into stock, >> which are both Asset accounts. >> >> Is there a better way to do these transactions so that I could ask the >> question: how much have I spent on stock this month? >> >> I am a complete newbie so would welcome any help or advice (short of 'get >> an accountant', which I would love to but can't afford). >> >> Kind wishes - Patrick >> ___ >> 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.
Re: [GNC] Beginner Accounting Question Using GnuCash
Patrick, Look carefully at point 2, one side of your transaction should be an expense as you are expending funds to buy stock eg Expense >> Stock Purchases rather than Stock on Hand ? Cheers David H On Fri, 17 Dec 2021 at 21:20, Patrick Skelton wrote: > Hi, > > I am trying to get my head around double-entry accounting. I think I have > kind-of got it. I have just set up a stripped down set of accounts and > tried a handful of transactions, to see how they affect profit-and-loss and > the balance sheet. It all seems to make sense except that there is one > piece of information that seems to vanish, and I am worried this means I am > doing something wrong. > > My transactions beginning with all zero balances are: > > (N*ote:* I have added some dates to give context to my later question) > >1. 1st Nov: I pay £100 into the business *Bank* financed by *Owner's >Equity*. >2. 2nd Nov: I buy some paper costing £12, which comes from *Bank* and >goes into *Stock on Hand*. >3. 3rd Dec: I sell a notepad for £12, which credits *Bank* and is >assigned to *Income - Sales*. >4. 4th Dec: I transfer the cost of the paper used to make the notepad >(£1.00) from *Stock on Hand* to *Expenses - Cost of Materials*. > > The Balance Sheet shows £111. Liabilities are zero. Retained Earnings are > £11, which gives total equity of £111. Thus the sheet is balanced. > > My question is that no matter what report I run using whatever dates, I > cannot see the £12 I spent on stock. All I ever see is the £1 that I > decided was the cost of the paper taken from stock. > > Even if I do reports only for the month of November, I don't see the £12 I > paid for stock because the money came from my bank and went into stock, > which are both Asset accounts. > > Is there a better way to do these transactions so that I could ask the > question: how much have I spent on stock this month? > > I am a complete newbie so would welcome any help or advice (short of 'get > an accountant', which I would love to but can't afford). > > Kind wishes - Patrick > ___ > 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.
[GNC] Beginner Accounting Question Using GnuCash
Hi, I am trying to get my head around double-entry accounting. I think I have kind-of got it. I have just set up a stripped down set of accounts and tried a handful of transactions, to see how they affect profit-and-loss and the balance sheet. It all seems to make sense except that there is one piece of information that seems to vanish, and I am worried this means I am doing something wrong. My transactions beginning with all zero balances are: (N*ote:* I have added some dates to give context to my later question) 1. 1st Nov: I pay £100 into the business *Bank* financed by *Owner's Equity*. 2. 2nd Nov: I buy some paper costing £12, which comes from *Bank* and goes into *Stock on Hand*. 3. 3rd Dec: I sell a notepad for £12, which credits *Bank* and is assigned to *Income - Sales*. 4. 4th Dec: I transfer the cost of the paper used to make the notepad (£1.00) from *Stock on Hand* to *Expenses - Cost of Materials*. The Balance Sheet shows £111. Liabilities are zero. Retained Earnings are £11, which gives total equity of £111. Thus the sheet is balanced. My question is that no matter what report I run using whatever dates, I cannot see the £12 I spent on stock. All I ever see is the £1 that I decided was the cost of the paper taken from stock. Even if I do reports only for the month of November, I don't see the £12 I paid for stock because the money came from my bank and went into stock, which are both Asset accounts. Is there a better way to do these transactions so that I could ask the question: how much have I spent on stock this month? I am a complete newbie so would welcome any help or advice (short of 'get an accountant', which I would love to but can't afford). Kind wishes - Patrick ___ 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.
