If I understand correctly, your receipt of money line
1 cost of shares
is the amount you sold the shares for. It sounds as if you coded this amount directly to the “ABC” account.
If so, you will want to adjust that line to the amount you were carrying the shares at (likely the amount you paid for them). You would then add a 4th line to the receipt for the difference between what you sold the shares for and what you paid for them; this is your gain or loss.
This 4th line should be coded to a Revenue or Expense account (typically titled "Gain(Loss) on sale of …). This will dispose of the asset, record the gain to your income statement, and result in the bank account increasing by the amount of cash you received.
@ACE1305, these terms suggest you are using an obsolete version of Manager. None of them is used any longer. You should update your software, or the Guides and discussion on the forum will not make sense to you.
I would advise against this. Unless securities trading is the primary business, marketable equity securities (“available-for-sale securities”) do not meet the IFRS or US GAAP definition of Inventory; this approach would likely not be acceptable for most businesses.
Generally, marketable equity securities should be presented as their own asset account (and marked to fair value).
Allow me to clarify; I was speaking in general terms. I do not mean to say one cannot account for securities as inventory (the IFRS and US GAAP definitions of Inventory can cover a range of tangible and intangible assets), only that the businesses where this treatment would be appropriate would be limited, and not suitable for most.
In the case of a securities trader, your example would be workable.
But in the case of a retailer that holds marketable securities, their inventory would be their retail merchandise and they could not co-mingle the inventory and the securities; the assets would require separate accounting, presentation, and reporting treatments under the major standards.
So I advise against this not because I feel you are in error, but as a caution to other users who may infer treating securities as inventory is acceptable in all situations; there are qualitative factors that must be considered before determining if certain assets should be treated as inventory.
Yes, and that is what Manager provides via control accounts. As an example, a business may require separate accounting and reporting treatments between raw materials and finished goods and these can be unrelated. By that I mean, the raw materials could be vehicle spare parts and the finished goods are unsold vehicles yet both components are recorded under Inventory Items.
The above business may have raw materials, finished goods as well as securities.
These are all recordable under Inventory Items as long as you structure accordingly.
The balance sheet via control accounts can document this separation which allows each sector to be market adjusted according to their circumstances.