Thanks to you and Ron!
On Sat, 2021-03-06 at 23:56 -0600, David Cousens wrote: > The methodology is a little different for each case. > > Where they have not paid the full amount of the invoice without your > acquiesence, then you would generally regard the unpaid amount as a > bad > debt. In a direct write off, you would create an "Expense:Bad Debts" > account and you would credit the Account Receivable account by the > amount > of the write off and debit the Expense:Bad Debts account by the > amount of > the write off. Your income is unaltered at the amount recorded on the > invoice and you are compensated by t the reduction in your Profit ( > and > hence taxable income) by the amount of the bad debt. The receivable > in the > form of the invoice is still active and you are still legally > entitled to > collect on the debt. If the customer eventually paid you at some > time > later, you would create a transaction for the Bad Debt entry between > Expenses:Bad Debts and Accounts Receivable at the time you receive > the money > and record the payments as usual. Depending on whether your > accounting is > on an accrual or cash basis you may need further adjustments. There > are a > number of ways of accounting for bad debts other than a direct write > off > where this is a regular feature in your business operations and you > really > need accounting advice if you need to implement them. > > if you agree to reduce the invoice amount, you could unpost the > invoice, > alter it appropriately and then repost it. This however does not > record that > you have offered the client a discount on the original agreed price. > > An alternative would be to treat it as a discount on the sale. In > this case, > you would use a contra account to your :Income:Sales Revenue account > i.e. > "Income:Sales Revenue:Sales Discounts". To record the discount, you > would > credit the Accounts Receivable for the amount of the Discount you are > applying to the invoice and debit " Income:Sales Revenue:Sales > Discounts" > for the amount you are discounting the invoice by. Again the Invoice > remains > at its original value and in this case your income is adjusted by > the > amount of the discount. > > The above are possible accounting treatments. Whether they are > allowable > will be jurisdiction dependent and you should seek local accounting > advice > as to whether the above approaches or another methodology is > applicable for > the reporting arrangements you need to comply with. > > > > ----- > 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.
