On 3/8/2018 4:06 AM, Maf. King wrote
I cannot look in income:sales to
determine how much taxable income I report, because it would include how
much I'm owed also.
As such, what is the best way to find out how much taxable income I make
per year to report on my taxes?
Hi,
This is the difference between "accruals" accounting and "cash" accounting.
Basically, GC's invoice module uses accruals - the tax is calculated based on
when you create the invoice, not when you are paid.
This is partially a case of "not a gnucash question"
Maf. King gave you an answer that partially addresses the "what if my
books are kept accrual but I report taxes on the cash basis?"
But there is another part of this. As anybody in business knows, SOME of
what you are owed never gets paid. In other words, there needs to be a
periodic adjustment for "bad debt" and/or the loss when outstanding debt
is sold to a collector for less than the face amount. Before asking us
"how do I do this using gnucash?" you need to look up "how this is
handled in any accounting system". Once you understand THAT (what the
transactions would be) you might easily see HOW to enter in gnucash or
you ask us at that point.
I will just give hints (ideas of what terms you might search for) "bad
debt" (generally an expense) "journal transactions" (a term for this
sort of adjustment)
Michael D Novack
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