Charge: Why both Expense and Revenue?

Q Wang
2006-03-30
2013-05-02
  • Q Wang
    Q Wang
    2006-03-30

    I don't understand why a "charge" could have two account related with it: Expense and Revenue.  My understanding is that when a new charge is created (such as monthly telephone fee), it should be only associated with an Expense account, and no default Revenue account should be provided (as we are not providing phone services and gain revenue from it!) However, the reality is that a charge has two accounts related with it, and when creating orders (sales or purchase), ALL charges - no matter expense or revenue charges) show up on the drop-down list and it is very easy to make errors and cause the transaction posted in the wrong accounts.  Does anybody else have thought about this problem, and have any resolutions?  Thanks.

     
    • ADAXA
      ADAXA
      2006-03-31

      I also find the two accounts codes unhelpful.  I always create two charges (say) freight-in and freight-out and set both account codes for freight-in to the expense account (etc).

      I struggle to think of another Charge (like freight) where it may be useful to have a sales context and a costs context with a single Charge description, particularly given the opportunity for error that it creates.

      I think the reason it is there will remain one of life's small mysteries .. [like when a BP is a customer and a vendor, which BP category do you put him in  :-/ ]

       
    • albert
      albert
      2006-03-31

      Dear all:
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      ----
      //Charge Account
      if (getM_Product_ID() == 0 && getC_Charge_ID() != 0)
      {
      BigDecimal amt = new BigDecimal (-1);//    Revenue (-)
      if (!m_doc.isSOTrx())
      amt = new BigDecimal (+1);//Expense (+)
      MAccount acct = getChargeAccount(as, amt);
      if (acct != null)return acct;
      }
      ----
      Evolution the Accounting Engine from Accounting Professor Albert
      ----

       
    • clee1868
      clee1868
      2006-04-13

      Why not?? I find it useful to have charge for both "Expense" and "Revenue". For example, if I want to track my "Purchases" and "Sales" based on the different types of "Input tax" and  "Output tax" I need to report on. By creating various charges such as "Standard", "zero rated" or "Out of scope", I can get the system to generate the right accounting entries (expense for purchases and revenue for sales) for both suitiation by using one single charge code, say "zero rate".

       
      • Q Wang
        Q Wang
        2006-04-13

        This is useful when you are selling and purchasing the same service (charge) and having both accounts associated with it really can make our life easier.  However, for the cases that you need to pay your phone bill (expense) and collect shipping and handling fee (revenue) from your customers, you do need to different charges, one for expense only and another for revenue only.  Thanks for reminding my your choice - this could at least help in the situation that we pay shipping fee to vendors  but also charge customers for shipping!