3

I recently purchased a few things on Amazon, but they split the items into multiple charges and orders:

Order 1: $40, 2 items
Order 2: $50, 1 item
Order 3: $250, 5 items

Charge 1: $40, Order 1
Charge 2: $50, Order 2
Charge 3: $150, 1 item from Order 3
Charge 4: $100, 4 items from Order 3

How should this be reflected in my ledger?

Recording Charges:

  • Entries in the ledger match actual bank charges
  • Cannot record entries until items ship

Recording Orders:

  • Entries in the ledger match Amazon receipts
  • Cannot record entries until items ship

Recording Total:

  • Easy to maintain in ledger
  • Ledger balance does not reflect true balance until all items ship
2

The moment you order something (and do not pay for it at the same time) you create a liability that you will have to pay in the future. This is represented by a liabilities account. So you file the expense towards the liability account first, and then when the orders are charged against your bank account this is then filed against the liability account.

For the following examples I assume an opening balance of 1000 USD in the bank at 2018-03-01 and that the purchase order for all items was done at 2018-03-15 and order 1 is shipped and charged 2018-03-21, charge 2 at 2018-03-22, charge 3 at 2018-03-23 and charge 4 at 2018-03-24.

The following accounts were created:

screenshot accounts

(not sure why "kontoer" was untranslated ("accounts"))


Initial purchase, three expense transactions - one for each order

screenshot expenses


First the liability builds up but then decreases as things are paid for until it reaches zero when everything is paid for.

screenshot liabilities


Bank payments only affects the liability account.

screenshot bank account


Everything in one view

screenshot general ledger

  • This makes a lot of sense. Does this affect reporting in any way for you? I can't think of anything off the top of my head. – Shane Apr 2 '18 at 0:28
  • Not sure kind of reporting you are thinking about, but the answer is no. – hlovdal Apr 2 '18 at 8:23

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