how to account for cash out

[gbfabiani]

Hi Mark,

sorry to raise a simple question , probably you answer it already many times in the past.

When in a cash account ( Bank in fact) I have to account for money who will "leave" the bank and the portfolio as well ( in fact a disinvesment) , what's the right procedure to account for in order not to influence the gain and yield calculations ??

a) a simple transfer out

b) a disinvestment, so basically booking a sell with price =1 and shares and value equal to the money who is going away ??

Similarly , what when money is added to a Bank , for instance new fresh savings : transfer in or buy ??

many thanks
giovanni

[Mark]

Hi giovanni,

The answer is your "b" solution. Just record a buy or sell of cash at a price of 1, and the shares/value equal to the amount deposited or withdrawn. All cash transactions are done at a price of 1.