Dumb accounting question on cards

Buccaneer

Just for the fun of it, I want to learn simple general accounting principles and apply them to my collection. I have no knowledge of accounting even though the terms are not unfamiliar to me. However, I just cannot grasp the concept of debits/credits, assets/liabilities, etc. For those here that run a business and knows the accounting side, how do you set up an accounting system in a software where really the only account is the inventory of cards? Can I perhaps get a quick primer on how the buying, selling and trading off cards apply to accounting principles?

mr3holesinone

Assets would be things like cash, cards and accounts receivable. Assets have a debit balance.

Liabilities are things you owe but haven't paid yet, accounts payable and loans/notes would be examples; liabilities have credit balances.

The two other categories you need are Revenues and Expenses. Expenses are debits, Revenues (Sales) are credits.

Let's say you are just starting a business from scratch. You would borrow money from the bank. Debit the cash account and credit the loan account. When you purchase cards you would debit Card Inventory and credit Cash.

You pay rent for your shop, debit Rent expense, credit cash.
Pay for phone installation, turn on electric, etc. debit utility accounts, credit cash.

First customer comes in and you have a sale. Debit cash, credit sales. Take the card out of inventory by debiting Cost of Goods Sold and credit Card Inventory for your purchase price when you bought the card for inventory.

Buccaneer

That was perfect, thank you. How does one account for trades (barters)?

paigowmichael

Trades are easy.

The entry is debit "cards inventory" and credit "cards inventory" for the same amount. Since you paid from the card inventory instead of with cash.

Unless there is an outstanding balance. Like a "card to be named later".

In that case the "CTBNL" value goes to either Trade/Barter Receivable (if you're the person who is still owed) or Trade/Barter Payable.

Lothar52

i wonder if youcould make a detailed record of every common fromthe 80s...the millions you have...and each year give 100k of them to charity and 5000 dollar rightoff.......nobody ever sells there commons from the 80s/90s really....what a way to get your money back u wouldnt otherwise have!

loth

WinPitcher

Only prob is what charity will take them?

MarkLee

Children's Hospitals are good places to give cards away to. Many of them will accept them and give them to sick children.

KansasJayhawk

Don't forget your line item for appreciation of your assets (cards)

I also work at a Children's hospital and all you need to do is bring in an inventory sheet of what you are donating and the charity will usually give you a signed reciept that will allow you to state the value. As long as you have your signed off inventory sheet of what you donated the tax man will give you full book value and serve as proof should you ever be audited.