I am not business owner, nor an accountant. I am a software developer who used to write accounting and ERP systems.
This view for income/expenses is ok. But it doesn’t account for refunds of either sales or purchases.
For example, if my customer returns a purchase and I send money back to them I should be able to have it under sales category, and have negative impact on my taxes pot. I.e. 120 refund, can be funded by 100 from the account and 20 from the tax pot (VAT).
Similarly if my expenses/deposits/purchases are refunded they are not income either. But should reduce my bills category too.
It always feels odd when “expenses” are making money, or “income” is loosing money, but such is life.
I don’t know how to design for this. But there should be a way to have income/expense with inverse tax impact. Aka “sales refunds” as expense category, and “expenses refunds” as income categories. Or something to that effect. Otherwise refunds of either kind will have incorrect impact on sales & expenses.
Edit: Note issues with refunds (bank transfer incomes) not affecting (expenses) budgets for personal accounts has 100+ votes at Include bank transfers in budget categories