I did what you suggested in the last post, but the accountant said there should be no income showing on the p&l. I am certainly making this harder than it should be, but my boss wants it correct! I can get the gift certificates on hand account to balance but it is just the receivables account that I can't get the correct balance in.
Post the message number of the thread where we were going over this issue. . .I will look at it again. . .
Laura
Laura DionA/R Question on Aug 14. and thanks for your help, I'm going insane because everything I do doesn't work!
I reread our posts from last week. . my head is spinning too!!
I suggest you get the accountant to help you on this one. . .
Laura
Laura DionI wish I could. They recommended the software but don't know how to use it. I will keep plugging along.
They should be able tell you how to post the activity. . .income is credited. . .expenses are debited. .. liability accounts are credited. . .asset accounts are debited. . .
If they can give you an overview (in accounting terms) how the info needs to be tracked, we can translate it into QuickBooks-ese. . .
Laura
Laura DionI wish they could even do that! All she tells me is that there should be no income and that if I have this amount of g/c on hand then the difference should be the receivables. The receivables were never right to begin with and all I am trying to do is know the proper way to get them into QB so I can go from there. She did tell me that when I make a deposit if they are paid for with cash then when I make a deposit to debit cash and credit the g/c on hand and if they are invoiced then I debit cash and credit the receivable but I have not been able to get this to work.
That makes no sense. . every time you debit cash, a deposit is made in your checking account ledger.
If the purchases are made on credit, it would not debit cash.
I am not sure what the answer is, but that second thing you said does not seem correct, unless money is actually going into your bank for the g/c invoiced.
Laura DionThank you so much for your help. I guess you can see why I am so confused. If we used the A/R for the gift certificates this would not be an issue.
Gift certificates issued are a liability. When a gift certificate is redeemed, you have a sale.
dr. gift certificate liab
cr. sale
When a gift certificate is purchased:
dr. cash ( or a/r)
cr. gift certificate liability
I just reread what I wrote previously, no wonder I am confused!
I meant to say that when the g/c are sold and the money is received right then, I make a deposit into the g/c on hand account. If they are invoiced is where I am having my problems keeping the numbers straight. I need to reflect on the balance sheet at any time of the month what the receivables are and I am having trouble trying to figure out how to get it in there. I don't think I should be using the make deposits window.
If you company does not supply the products that the gift certificates can purchase then the certificates themselves are your companies product. The certificates are inventory assets. They should balance the same way any inv does. Or use a variance account to adj to actual. The receivables should work as any normal ar account. Cr sales and dr a/r when they purchase, cr a/r and dr cash when they pay.
But, I could be missing something.
HTH
Ken
Thanks for your answer. That seem logical to me, my concern is that the accountant says that we are not to show any income on the gift certificates.
yes we do. We don't make any money off of them. It is more of a service that we offer our members and the public. They will buy them and redeem them at businesses in our town. So after we sell them, we never see the certificate again. If we buy one for ex. 10.00, we will sell it for 10.00
yes that is right. That is what is so confusing from the accountant. She said nothing should pass through the income statement. My head is spinning!
Your "Accountant" is making this harder than it has to be.
If you are purchasing gift certificates to sell at cost, you will have very simple entries. Set up an "other charge" item called Gift Certificates. Put a check mark in "this item is used in assemblies...". Then have the purchase information expense account be an other asset account called "Gift Certificates". Have the sales information income account be the same "Gift Certificates" account. Leave the cost and sale price at zero. Be sure to set the item up as non-taxable.
Now when you purchase gift certificates, use the gift certificate item and enter the dollar value of the purchase. When you sell gift certificates, use the gift certificate item and enter the dollar value of the sale.
Then, and this is the most important thing of all, convince your boss to get rid of that "accountant" and hire a REAL Accountant!!
When you sell the gift certificate and have to charge card or invoice it, the j/e is:
dr. A/R
cr. Gift Certificate Liab
Thank you for your answer and trying to get this straight. When I buy the g/c using this items thing, where do I show the money coming out of the checking account for the g/c's?
And also will this method take care of the accounts receivable?
When you buy the gc the trans is Credit "Cash in Bank" and Debit the "gc on hand" asset account. This journalized the actual check written for the certificates.
