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An Expense made in previous year via credit card, now partial payment got refund in current financial year due to non-use of service. How to record? Thanks in advance.

I made a payment for flight ticket using the business credit card (transfer reflected in banking as "spent") in Dec-2018 (previous financial year), the flight was cancelled by me, so the carrier refunded a partial payment (after deducting cancellation charge) to my business credit card (transfer reflected in banking as "received") on Jan-2019 (current financial year). How do I record this?

Thank you so much in advance for your support.
4 Comments
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Re: An Expense made in previous year via credit card, now partial payment got refund in current financial year due to non-use of service. How to record? Thanks in advance.

"+" Vendors> Credit Card Credit

same expense category and it will be reflected as a negative expense this year. The way credit card charges work is you take full expense the day the charge goes on the card regardless of when you pay the cc company. These are micro loans, not bills to pay. So the refund will reverse a certain amount of the original charge but is in this year's business whereas the original charge was last year's perfectly allowable and deductible expense 

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Re: An Expense made in previous year via credit card, now partial payment got refund in current financial year due to non-use of service. How to record? Thanks in advance.

I would use other income, and not an expense account

 

driving the expense account negative is bad form IMO, and if there are other expenses posted to that account, the balance in the account will not be an accurate reflection of this years expense

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Re: An Expense made in previous year via credit card, now partial payment got refund in current financial year due to non-use of service. How to record? Thanks in advance.

Good point since this is not a physical object. That is why I almost always post refunds-rebates-discounts as above the line Income. But the scenario changes if the original purchase was an inventory or asset item.

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Re: An Expense made in previous year via credit card, now partial payment got refund in current financial year due to non-use of service. How to record? Thanks in advance.


@john-pero wrote:

But the scenario changes if the original purchase was an inventory or asset item.


the OP did say expense, have to trust that is what it was