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How to book those transactions?

momu
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How to book those transactions?

Sun Nov 26, 2017 9:08 pm
Hi,

I started using KMM for tracking all our common expenses.
KMM is connected to my checking account at my bank at gets all transactions from there. As a Gnucash user long time ago I thought I was familiar with the double-entry accounting. All my transaction accounting went well but one thing gives me serious headaches:

The real world situation (aka transfers on my checking account):

Code: Select all
Car sale                       +500
Transfer to savings account    -400


So what I did was obviously took most of the car sale money and put it on my savings account and left a small amount on my checking amount for other things.
I thought I can put it this way into KMM

Code: Select all
Car sale                       +500 -> Category Income:others
Transfer to savings account    -400 -> Transfer to: Asset:savings


In theory there should be just +100 in the category Income:others, +100 in the checking account and +400 in the savings account.
But in practice I have +400 in the savings account, +100 in the checking account but +500 in the income:others category.
That makes perfectly sense because there is no link in the means of a transfer between Income:others and Asset:savings.

As I'm tied to the transfers my bank reports (that the balance matches) I can only add N*2 transfers with the difference of 0. So I could add e.g. a +400 and a -400 transfer to the checking account. But this would end up in +800 in the savings account, +100 in the checking account and +100 in the income:others category.

So does anybody can explain me how to solve this mystery?

Thanks
Moritz
User avatar ipwizard
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Re: How to book those transactions?

Sun Nov 26, 2017 9:30 pm
momu wrote:
Code: Select all
Car sale                       +500
Transfer to savings account    -400


So what I did was obviously took most of the car sale money and put it on my savings account and left a small amount on my checking amount for other things.
I thought I can put it this way into KMM

Code: Select all
Car sale                       +500 -> Category Income:others
Transfer to savings account    -400 -> Transfer to: Asset:savings


In theory there should be just +100 in the category Income:others, +100 in the checking account and +400 in the savings account.

The numbers you expect don't balance. This can't be.

momu wrote:But in practice I have +400 in the savings account, +100 in the checking account but +500 in the income:others category.
That makes perfectly sense because there is no link in the means of a transfer between Income:others and Asset:savings.

As I'm tied to the transfers my bank reports (that the balance matches) I can only add N*2 transfers with the difference of 0. So I could add e.g. a +400 and a -400 transfer to the checking account. But this would end up in +800 in the savings account, +100 in the checking account and +100 in the income:others category.

So does anybody can explain me how to solve this mystery?

Thanks
Moritz

You need to split the transaction in the checkings account so that you have 100 in the checking which comprises of two splits: 500 income:others and 400 transfer to savings. Now as you already mention, you have two transactions in the savings account, both show 400. Open the savings account, select the two transactions and merge and accept them. This will reduce it to one and keep the bank download happy. The order in which you select the two transaction may have an influence on the operation. If it does not work as expected, select them the other way around before merging.

If this does not make sense, how would you do it in GNC?

p.s. In German this seems to be called "Buchung zuordnen" (merge) and "Buchung annehmen" (accept).


ipwizard, proud to be a member of the KMyMoney forum since its beginning. :-D
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momu
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Re: How to book those transactions?

Wed Dec 06, 2017 10:17 pm
Thanks for the reply. I played around in the last days, but did not find a final solution.
ipwizard wrote:
momu wrote:
Code: Select all
Car sale                       +500 -> Category Income:others
Transfer to savings account    -400 -> Transfer to: Asset:savings


In theory there should be just +100 in the category Income:others, +100 in the checking account and +400 in the savings account.

The numbers you expect don't balance. This can't be.



Why not?
I have a 500 € transaction to my checkings account, put this to the category income:others. So there are 500 now. The next transaction is 400 from the checkings to the savings
account which I expect to be somehow connected with the income:others category. So that there are only 100 € left.
What I want to achieve is: receiving 500 on the checkings account, sending 400 from this to the savings account and assign the remaining 100 to the income:others category to spend it later on something else.

But maybe I got the concept of categories wrong. But as of know I just imagine the category as a box where I put money in and take money out.

ipwizard wrote:You need to split the transaction in the checkings account so that you have 100 in the checking which comprises of two splits: 500 income:others and 400 transfer to savings. Now as you already mention, you have two transactions in the savings account, both show 400. Open the savings account, select the two transactions and merge and accept them. This will reduce it to one and keep the bank download happy. The order in which you select the two transaction may have an influence on the operation. If it does not work as expected, select them the other way around before merging.

I tried it that way and it worked. But now I have 500 (income) and a balance of -500 in the income:others category, which is not what I expected.
the balance on my checking account is 100, which fits. The balance on the savings account is, after matching the transactions, 400, which fits also.
The transaction from checking to savings disappeared after merging.

By the numbers it seems to fit this way (-500 vs. 100+400) but it makes no sense for me.

ipwizard wrote:If this does not make sense, how would you do it in GNC?


I can't say. When I used GNC I did not have to deal with two bank accounts. Just on bank account and putting/splitting everything in the correct categories.

ipwizard wrote:p.s. In German this seems to be called "Buchung zuordnen" (merge) and "Buchung annehmen" (accept).

Don't mind, it's an English interface here ;)
User avatar ipwizard
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Re: How to book those transactions?

Thu Dec 07, 2017 9:11 am
momu wrote:Why not?

You sold your car and received 500€ in your checkings account. This is 500 € of income. By transferring that money between your accounts (which you did with the 400 € transfer to your savings account) your income does not change! It is still 500 €. That is how accounting and double entry bookkeeping works.
Even though the idea sounds cool: I receive my salary in my checkings account (which is income) and transfer parts of it to my savings account and that will reduce my income. Since my income drops I have to pay less taxes. Yay! Unfortunately, it does not work that way.

momu wrote:But maybe I got the concept of categories wrong. But as of know I just imagine the category as a box where I put money in and take money out.

Income and Expense (so called categories) are Sachkonten. There is no money that you put in or take out. They just record where money came from and where it went to. Asset and Liability (so called accounts) on the other hand are Anlage bzw. Verbindlichkeitskonten and they track the funds. That is where you take out money and put it in.
So in your example with 100€ left in the checkings account you take a nice lady to dinner and pay 80 €. Those 80 € will be categorized as Expense:Leisure:Dinner or whatever you want it. This leaves 20 € in your checking account and the sum of all is still zero (which means it balances). Transferring the remaining 20 € to your savings account does not magically increase your dinner expense either (fortunately).

momu wrote:I tried it that way and it worked. But now I have 500 (income) and a balance of -500 in the income:others category, which is not what I expected.
the balance on my checking account is 100, which fits. The balance on the savings account is, after matching the transactions, 400, which fits also.
The transaction from checking to savings disappeared after merging.

By the numbers it seems to fit this way (-500 vs. 100+400) but it makes no sense for me.
... but you mentioned initially that you understand double-entry bookkeeping. Then it should make sense to you.

momu wrote:
ipwizard wrote:If this does not make sense, how would you do it in GNC?


I can't say. When I used GNC I did not have to deal with two bank accounts. Just on bank account and putting/splitting everything in the correct categories.
But that is a complete different setup.

momu wrote:
ipwizard wrote:p.s. In German this seems to be called "Buchung zuordnen" (merge) and "Buchung annehmen" (accept).

Don't mind, it's an English interface here ;)
Ok, but I left some German terms in this post since sometimes they help to understand and I learned German many moons ago.


ipwizard, proud to be a member of the KMyMoney forum since its beginning. :-D
openSuSE Leap 42.2 64bit, KF5

 
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