On 2024-10-14 04:10, Boniforti Flavio wrote:
> I bought an item for 1050 EUR, which I took from my EUR checking account.
> Then the seller reimbursed 50 EUR because of some issues on the item. This
> reimbursement in EUR was done via PayPal, where I do have both EUR and CHF
> currencies.
> I paid out CHF 46.56 from PayPal to my CHF checking account.
>
> Now... how do I enter this transaction correctly?
> The item I bought is registered in a EUR asset account - Increase of 1050
> EUR.
> Now I would enter a "decrease" transaction to reduce its value of 50 EUR,
> but I have to take this money from the CHF checking account. So what's the
> correct way to do this? Should I select my "CHF checking account" for the
> "transfer" column, but enter the value in EUR (50) and then apply the
> currency conversion?
I believe thinking of "this transaction" (singular) makes it seem harder
than it than it actually is. I see two or three transactions here.
(1) Debit the Asset account for the "item" by 1050 EUR, credit checking
account the same amount.
(2) Credit the "item" 50 EUR for the partial refund, and debit PayPal 50
EUR.
(3) Credit your PayPal account CHF 46.56, and debit your CHF checking
account the same amount.
Notes:
In logic, transaction (3) is really not connected to (1) and (2). You
could have withdrawn a different amount, or none. So you have at least
two transactions here. You could condense (1) and (2) into a single
transaction, but I think it will be clearer what happened if you keep
them separate -- especially if some time passed between (1) and (2).
I know the "friendly labels" exist, but along with several other posters
I feel that these things they are actually harder to use than "Debit"
and "Credit", which have been around for half a millennium or more. A
number of other posters have made similar comments about "debit" and
"credit actually making things easier. There's really very little to
memorize:
ASSETS and EXPENSES: increase is debit, decrease is credit.
LIABILITIES, EQUITY, and INCOME: increase is credit, decrease is debit.
Stan Brown
Tehachapi, CA, USA
https://BrownMath.com
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