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.
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: