Question about split transactions
in [Quicken]
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From: R. C. White on 18 Nov 2009 09:22 Hi, Jose. You are right. Doug is wrong. RC -- R. C. White, CPA San Marcos, TX (Retired. No longer licensed to practice public accounting.) rc(a)grandecom.net Microsoft Windows MVP (Using Quicken Deluxe 2010 and Windows Live Mail in Win7 x64) "Jose68" <jose.simonplaza(a)gmail.com> wrote in message news:d1d76211-10d8-40ab-b094-5f6fd8591df4(a)g1g2000pra.googlegroups.com... > On Nov 17, 6:51 pm, Doug <Doug_Ell...(a)yho.com> wrote: >> Jose68 wrote: >> > > in Quicken: how to enter split transactions. Maybe there is a way to >> > do this in Quicken, but I can't find it! >> >> > Let me use an example, an expense with two categories: >> > - Games - $25 >> > - Software - $35 >> > - Sales Tax - $7 >> > - TOTAL $67 >> >> > In Money, I could type $67 as total, and once in the split window, I >> > could type $25 and $35, and let Money assign the difference ($7) >> > proportionately into all categories by pressing F6. Or I could assign >> > that difference to one single line item, if applicable, pressing F5. >> >> > Is there something similar in Quicken? When I'm splitting a >> > transaction in 4 or 5 splits, it is a pain to have to calculate sales >> > tax one by one. >> >> Yours is one of the many questions we see here that can be reworded as >> "why won't Quicken, an accounting program, let me violate all the rules >> of accounting and put any number I want wherever I want?" >> >> You did NOT spend $28 on games and $39 on software. You spent what you >> wrote. If you wish to pretend that money you spent on taxes was spent >> on software, be my guest. But why would you imagine Quicken would be >> programmed to facilitate faking the numbers? >> >> Doug > > Thanks for enlightening me, Doug. Maybe you want to reword my > question as you did, but that would be your question, not mine. But > maybe because I have worked as an accountant myself, I neither > consider Quicken an accounting program, nor I want to track my > finances as I would do as an accountant. For example, I do NOT want to > track sales tax as a different category. I want to allocate sales tax. > And I am sure that a significant percentage of Quicken users are NOT > tracking sales tax as a different category, nor they would want to. > > If I was to do as you seem to suggest, so "I don't fake the > numbers" (good grief), I guess that if you purchased JUST the piece of > software in the example about, you would create a split transaction to > make sure you put $35 as software, and $4 as sales tax. What a pain. > And what about expenses that I pay with my debit card and don't keep > the receipt? Do I need to back-calculate the pre-sales tax portion > and make a split for that? > > The more I think about this, the more I would like to keep my question > as it was. I would like Quicken to make my life simpler, and help me > allocate sales tax (or anything else I want to proportionally allocate > for that matter) as Money does. And don't worry, if Quicken hears me > out, you won't have to use it. It would be an option. You can keep > tracking sales tax for all your purchases. > > But thanks for letting me know that I am violating accounting rules, > and living around faked numbers. I never saw it that way.
From: R. C. White on 18 Nov 2009 09:31 Hi, Doug. I don't know where you studied accounting, but you apparently misunderstood what you were taught. An expense - or an asset purchase - includes all the costs necessary to get the item into your possession and ready to use. Depending on the type of product acquired, those costs might include freight, shipping and handling, installation, commissions paid by the buyer...any of many kinds of expenditures. AND taxes levied on the buyer for the transaction, such as sales taxes paid to the seller (for transmission to the state) or use taxes paid directly to the state for items purchased sales tax-free (for resale or from another state in some cases) but on which the use tax must be paid. A much longer lesson is available, Doug, but this should suffice for today. RC -- R. C. White, CPA San Marcos, TX (Retired. No longer licensed to practice public accounting.) rc(a)grandecom.net Microsoft Windows MVP (Using Quicken Deluxe 2010 and Windows Live Mail in Win7 x64) "Doug" <Doug_Ellice(a)yho.com> wrote in message news:riJMm.18948$ky1.7927(a)newsfe14.iad... > Jose68 wrote: >> > in Quicken: how to enter split transactions. Maybe there is a way to >> do this in Quicken, but I can't find it! >> >> Let me use an example, an expense with two categories: >> - Games - $25 >> - Software - $35 >> - Sales Tax - $7 >> - TOTAL $67 >> >> In Money, I could type $67 as total, and once in the split window, I >> could type $25 and $35, and let Money assign the difference ($7) >> proportionately into all categories by pressing F6. Or I could assign >> that difference to one single line item, if applicable, pressing F5. >> >> Is there something similar in Quicken? When I'm splitting a >> transaction in 4 or 5 splits, it is a pain to have to calculate sales >> tax one by one. >> > > Yours is one of the many questions we see here that can be reworded as > "why won't Quicken, an accounting program, let me violate all the rules of > accounting and put any number I want wherever I want?" > > You did NOT spend $28 on games and $39 on software. You spent what you > wrote. If you wish to pretend that money you spent on taxes was spent on > software, be my guest. But why would you imagine Quicken would be > programmed to facilitate faking the numbers? > > Doug
From: Doug on 18 Nov 2009 14:48 R. C. White wrote: > Hi, Doug. > > I don't know where you studied accounting, but you apparently > misunderstood what you were taught. > > An expense - or an asset purchase - includes all the costs necessary to > get the item into your possession and ready to use. Depending on the > type of product acquired, those costs might include freight, shipping > and handling, installation, commissions paid by the buyer...any of many > kinds of expenditures. AND taxes levied on the buyer for the > transaction, such as sales taxes paid to the seller (for transmission to > the state) or use taxes paid directly to the state for items purchased > sales tax-free (for resale or from another state in some cases) but on > which the use tax must be paid. > > A much longer lesson is available, Doug, but this should suffice for today. > > RC University of Connecticut, many years ago. I understand aggregation of separate costs to form a larger cost, such as in Cost of Goods Sold. But the way I was taught, sales tax does not add to an asset's valuation. If I bought a $10,000 truck and paid $1,000 State Sales Tax, I would debit $11,000 from my bank account, create a $10,000 asset, and book a $1,000 expense for Sales Tax. Is that not correct? I believe that for OP to wish to distinguish his computer game expenses from his software expenses, but not his tax expenses, is whimsical. He has every right to be whimsical in his bookkeeping if he wishes, but there's little reason for Quicken to have been programmed that way, is there? Doug
From: Doug on 18 Nov 2009 15:20 I'm actually having a hard time thinking of a situation in which one would capitalize a point-of-sale Sales Tax payment. Maybe there is one. I understand the impulse to fold the sales taxes paid to the State into the "cost" of the purchase. Now that Sales Tax is generally not federal deductible, there's little benefit for an individual to track the expense. One could just as easily IGNORE the taxes, too, and (using Quicken's feckless terminology) simply not categorize that portion of the split instead of apportioning them. Many of my purchases involve a mix of taxable and non-taxable items. So when for example I'm splitting a Costco bill, I might have some portion categorized as groceries, some as clothing, and some as medicine. In my state, groceries aren't subject to sales tax, so if Quicken apportioned the sales taxes to all the split categories, that would be incorrect also. But I still come back to the notion that Quicken can't be expected to read my mind. It has to be programmed with some conventions in mind, and the conventions Intuit used are vaguely based upon bookkeeping principles. My recollection is that this thread began with a new Quicken user asking why Q didn't let him do something that Microsoft Money did let him do. The only reasonable answer is that Intuit didn't write the software that way because they didn't think anyone would/should want to falsely categorize an expense. Doug
From: TomYoung on 19 Nov 2009 10:53
On Nov 18, 12:20 pm, Doug <Doug_Ell...(a)yho.com> wrote: > I'm actually having a hard time thinking of a situation in which one > would capitalize a point-of-sale Sales Tax payment. Maybe there is one.. Well, from a strict theory standpoint, R.C. White expressed the accounting convention correctly, so there's actually lots of situations where you'd capitalize sales taxes. Quicken gives you the flexibility to be conventional or unconventional in your accounting. :-) > Many of my purchases involve a mix of taxable and non-taxable items. So > when for example I'm splitting a Costco bill, I might have some portion > categorized as groceries, some as clothing, and some as medicine. In my > state, groceries aren't subject to sales tax, so if Quicken apportioned > the sales taxes to all the split categories, that would be incorrect also.. You've expressed the most significant problem to the "really easy to implement" process of automatic allocation of sales tax. In California, unprepared food items sold at supermarkets are not taxed but ready-to-eat hot foods are taxed, as are soft drinks and cat food. But, for my accounting, it's all "food" and the only way an automatic allocation of sales tax could work is if I set up two categories of "food" - maybe "food non-taxed" and "food taxed" and then Quicken supplied a check box in the category setup that identified each category as to sales tax eligibility. Depending on how you categorize purchases, where you shop, and your local sales tax structure you could end up with dozens of categories you'd have to identify this way. > But I still come back to the notion that Quicken can't be expected to > read my mind. It has to be programmed with some conventions in mind, > and the conventions Intuit used are vaguely based upon bookkeeping > principles. My recollection is that this thread began with a new > Quicken user asking why Q didn't let him do something that Microsoft > Money did let him do. The only reasonable answer is that Intuit didn't > write the software that way because they didn't think anyone > would/should want to falsely categorize an expense. Nah, that's not the case. Accounting conventions are certainly *not* what drives the programming at Quicken; it's much more the "black letter" government rules and and regulations, e.g., capitalizing the "expense" of broker's fees in your stock basis. I've complained here before, many times, that Quicken should have a lot more accountants working on the product to catch improper accounting that's "built in" by the programmers. Tom Young |