We sell state lottery & scratch offs as well as pay winners. Technically we get reimbursed for the payouts, but it really ends up just being a carry forward until we owe the state, then we pay them a lesser amount. However, this daily lottery payout amount needs to come off of our undeposited funds as we no longer have it to deposit. How should I correctly set up a lottery payout account to accomplish this? What other accounts should I set up/use in order to accomplish the accounting for the lottery? The full sale (which we have to pay out at some point less a %) is included in our daily sales. I was thinking I could leave that full amount then offset the payout to the state with COGS, thus reflecting in our P&L. Is this the most efficient way? Is there an easier way that includes all aspects plus the lack of cash due the payouts? Thank you.
