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Super Contributor *

Gift Cards, On account customer charges....

Looking for help with a couple entries to fix my gift card and on account accounts, Im not sure how to explain this but im gonna try...

 

I have an other current asset account named "on account charges" which is for both employees and customers who charge food(restaurant) and pay at the end of the month.

 

I also have an other current liability account named "gift cards" which goes up and down as i sell and redeem gift cards.

 

I use a point of sale system and use the z-tape at the end of each night to enter my daily sales into quickbooks.

I took the business over  April 1 of 2018 and have everything entered correctly from that point on, my problem is this:

When I acquired the business there were outstanding gift cards that I am honoring and also customer charges that were paid after I set up quickbooks but charged before so the numbers do not match the actual outstanding balances. I realize this probably should have been done at the beginning and before the 2018 taxes were done to be properly recorded but with all the confusion from everything I had going on at the time it slipped my mind so I am trying to adjust it now.

Example- I have 700.00 of outstanding gift cards(actual) and 200.00 accounted for in QB so I need to increase gift card liability account by 500.00 but what account should it come from ?

 

Example- There is 280.00 owed for on account charges(actual) my on account asset account in QB shows -150.00, how do I adjust this and what accounts do I Credit/Debit ?

 

Thank you for any help

Solved
Best answer 04-21-2019

Accepted Solutions
Established Community Backer ***

Re: Gift Cards, On account customer charges....

do a journal entry for the adjustment and use retained earnings for the offset account

 

ie

debit RE, and credit gift card liability, 500

4 Comments
Established Community Backer ***

Re: Gift Cards, On account customer charges....

do a journal entry for the adjustment and use retained earnings for the offset account

 

ie

debit RE, and credit gift card liability, 500

Super Contributor *

Re: Gift Cards, On account customer charges....

Thank you rustler, I was told by a couple people on this forum to close retained earnings out to shareholder capital but I have not done that yet so should I close it out first then make the journal entries to zero’ed out RE ? Or debit shareholder capital instead of RE ? It’s a single shareholder s-Corp 

Established Community Backer ***

Re: Gift Cards, On account customer charges....

do this adjustment before you close RE to shareholder capital

Super Contributor *

Re: Gift Cards, On account customer charges....

Ok Thank you Rustler

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