[Kmymoney] Payers and payees..

[Thomas Baumgart]

Hi,

on Thursday 23 February 2012 04:41:49 Jack wrote:

> > (3) When I bank the money I credit the bank account and debit "Egg  
> > Sales"-
> 
> I'm not sure exactly what you mean her by debiting Egg Sales.  If you  
> do a transfer from the Cash account to the Cheque account, you do not  
> need to reference any payee or category.

I think Jack gives the right answer: The Egg sales are not involved in this 
transfer at all. I try to explain your process in other words.

The process is:
 - multiple people show up, buy eggs and pay in cash
 - you drop the money received in your cash box
 - at the end of the day (or any other period of your choice) you take the 
money out of the cash box in one sum and put it into the bank account.

Bookkeeping wise you have actually three accounts involved:
cash box (C), egg-sales (E) and bank account (B). Each of the above is a 
transaction. Let's assume, two people P1 and P2 show up and buy eggs for 10 
and 20. Also, we assume all balances of those three accounts are zero in the 
beginning of this example. Also, we can simply call 'categories' accounts. We 
just distinguish it for the user. You record these sales as follows:

  P1:  (E) -> (C) 10
  P2:  (E) -> (C) 20

The trick here is that the balance of C is now 30 and that of E -30. Don't 
worry that income is negative: it's just the way book-keeping works. Now you 
transfer the contents of the cash box to your bank account. The payee is not 
important and could be yourself but also left empty.

    :  (C) -> (B) 30

The balance situation now is:

   E: -30
   C:   0
   B:  30

If you now run an asset/liability report you see B with a balance of 30. That 
is what you have. If you run an income/expense report you'll see the 30 as 
income for egg-sales (E). Let's assume, P3 shows up and buys some poultry 
(category is P) for 40. The transaction is:

  P3:  (P) -> (C) 40

The balance situation is now as follows:

   E: -30
   P: -40
   C:  40
   B:  30

You might wonder, that the sum of all balances is zero: that is what double-
entry accounting is all about. If it's not zero you have a problem.

I hope this is somewhat understandable. I am not a farmer (though my ancestors 
are) and don't know anything about egg-sales ;)  If you want, you can also 
read the fine bean example in the manual:

http://kmymoney2.sourceforge.net/kde4/online-manual/makingmostof.html

-- 

Regards

Thomas Baumgart

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