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apolski
Level 2

Adding refunds or credits to expense or income account?

Here are two examples that convey my question:

 

#1 Cash ATM withdrawal & deposit in one expense account:

- Business cash withdrawal of (-$1000) to purchase equipment is made to petty cash (expense).
- Only $100 was spent, so (+$900) was deposited back to petty cash (expense); leaving -$100 balance.

- Cash expense of $100 is added for equipment purchase; petty cash (expense) is now $0 (balanced).

 

#2

Bank charges (expense). Bank provides me a $50 credit to reverse a fee charged to me over the telephone. Is this income or is it reducing the bank charges (expense) account?

 

Solved
Best answer March 07, 2022

Best Answers
Rustler
Level 15

Adding refunds or credits to expense or income account?

The bank deposit of 50 should post to Other Income

 

The way you did things in #1 works, not what I would suggest, but it works

View solution in original post

1 Comment 1
Rustler
Level 15

Adding refunds or credits to expense or income account?

The bank deposit of 50 should post to Other Income

 

The way you did things in #1 works, not what I would suggest, but it works

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