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Level 1

Donating Gift Certificates

Hello, I use Quickbooks Online and my business is considered a Sole Proprietorship/DBA. Can somebody list the steps/transactions to make to account for this situation:

I donated a gift certificate to be a part of a raffle on 2/28/20. What transactions do I make to show that there is a gift card out there, but it was donated. Also, what transactions do I enter when the person comes back to actually redeem the gift certificate. Also the gift certificate that was donated is actually for a specific service to be done which then translates into a cash amount for that service. (Ex: Interior Detailing Package, is equal to about $60 depending on the type of vehicle the gift certificate holder brings in). 

I have read many articles on selling and redeeming gift cards and I understand the need for a liability account to show how many outstanding gift cards we have out there. I am just confused because this gift was donated and I need a step by step explanation for each transaction I should make in Quickbooks Online as well as each new account in the Chart of Accounts I should create. 

Thank you for your help!

1 Comment
Moderator

Donating Gift Certificates

Hi, extremeautodetailingwny.

 

I'd be glad to help you record your gift certificates. You can create a journal entry to show that you have gift certificates. You can also create the same transaction when you redeem them.

 

All entries may be considered to be a cash basis, regardless of the accounts placed in the journal entry. You can make journal entries in QuickBooks by following these step-by-step instructions:

 

  1. Select New ⨁.
  2. Select Journal entry. Or if you're in Business view, switch to Accountant view first. Then come back to these steps.
  3. Fill out the fields to create your journal entry.
  4. Select Save and new or Save and close.

However, I'd suggest consulting an accountant to help and guide on which account to debit and credit. Your accountant can provide more expert ways of dealing with this situation and help you create the right account.

 

I'm including these articles to learn more in recording and redeeming gift certificates in QuickBooks Online:

 

Don't hesitate to leave a comment below if you have any other questions. I'm always here to help.

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