Sales Receipts

CarrieMT · ‎August 24, 2020

i just took over the bookkeeping for 2 restaurants and am trying to make the transition from the previous person to me as smooth as possible. When i started to put in this years sales receipts (yes, no one has done the bookkeeping since Jan 2020) i noticed something strange that I can't figure out. Maybe someone out there can enlighten me. This is how the previous person put in a receipt:

Sales Sales Income 1 $100.00 $100.00

Tax Sales Tax 1 $10.00 $10.00

Gift Cards Gift Card Sale 1 $20.00 $20.00 (a liability account)

Cash Sales: cash -1 $10.00 ($10.00)

Visa/MC Sales: credit -1 $95.00 ($95.00)

Gift Card Gift Card Redemption -1 $25.00 ($25.00) (same liability account)

Total $0.00

Does this make sense to anyone? Shouldn't a gift card purc

ChristieAnn · ‎August 24, 2020

Hi there, CarrieMT.

Yes, the purchase of the gift card is recorded as a liability. This is because you have an obligation to provide services or goods at a later time. When the gift card is redeemed by the customer for services or goods, you reduce your company’s gift card liability and record revenue for the sale to the customer. That said, when a gift card is used, the initial liability is shifted into a sale transaction.

When you accept payment for a gift certificate, you accept the liability to redeem the gift certificate at some time in the future. In order to fulfill that responsibility and track the transaction in QuickBooks Online, you need to set up a liability account and special items to use on a gift certificate.

For additional information, you can click this article: Sell and redeem gift cards or certificates in QuickBooks Online.

I'd also recommend consulting an accountant. They know the best way to enter the transactions and ensuring that it suits your accounting preference.

You can also refer to this article on how to record and track gift certificates you purchase from vendors in QuickBooks Online: Record gift certificates purchased from vendors.

Feel free to drop by if you have more questions. Have a great day!

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