Chart OF Accounts. - Confusion

[kentvapour]

Good Afternoon,

I am sure this is something which I am doing wrong. Let me briefly explain my setup.

I run a retail outlet. I have two clients setup in QF, one called Daily Takings Cash and the toher Daily Takings Card. I take the the Z readings from my till and input these under each client. Then assign payments as required.

As for Purchases I class all of my purchases as stock asset (unless otherwise catagorised)

I took a brief look at the chart of accounts today and notice that the total in and out amounts are equal.

Is this normal or something which I have done wrong? I hope you can help.

Thanks
Jamie

[Glenn]

@kentvapour

I took a brief look at the chart of accounts today and notice that the total in and out amounts are equal.

Is this normal or something which I have done wrong? I hope you can help.

This is indeed normal, if they were not equal it would be abnormal.

In double entry accounting, for every credit there is an equal and opposite debit.

There’s a few examples on our infographic here.

[ian_roberts]

@kentvapour

As for Purchases I class all of my purchases as stock asset (unless otherwise catagorised)

If you’re treating stock purchases as an asset then whenever you make a sale you’d also need to journal the cost price of whatever you sold across from stock to a purchase nominal such as “General purchases” for it to show the correct cost of sales in your profit and loss. An easier approach would be to treat your stock as general purchases to start with, and just correct for opening and closing stock with journals at the year end to get the right whole year profit.

This thread has more details.