Gift Voucher Sales

by Karen
(Scotland)

Business is a Hair Salon.


Customer buys a gift voucher ... total Gift Voucher sales for the week is £100.

I am recording - Credit in Gift Voucher Cash Book - where I put the money and debit Gift Voucher Account as a short term liability.

Customer sales for the week are £1000 - £900 in cash and £50 in Gift Vouchers.

Record Sales = debit sales - credit Cash Sales & credit Gift Voucher Cash Book

£50 of GV sold have been redeemed so I credit GV Cash Book £50 debit GV Account

The Gift Voucher Account is fine, liablity £80 but the cash book is not £100+£50-£50 , balance in GV Gift Voucher Cash Book £100

Where I have I gone wrong?



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Hi Karen,

Your customer sales entry does not total £1000. £900 + £50 equals £950. You are £50 short. You are also mixing up your debits and credits.


Here is how I would book your entries:


Sale of a Gift Voucher

Debit (Increase) Cash in Bank (a current asset on your balance sheet) £100

Credit (Increase) Outstanding Gift Vouchers (a current liability on your balance sheet) £100


Sales for the Week

Debit (Increase) Cash in Bank (a current asset on your balance sheet) £900

Debit (Decrease) Outstanding Gift Vouchers (a current liability on your balance sheet) £50

Credit (Increase) Sales (an revenue account on your income statement) £950

I believe if you have VAT to account for, it is recorded at the time of the sale, not at the time the Gift Voucher is purchased ... but you should double check that as Scotland may be different than Canada.




Balance of Outstanding Gift Vouchers account is:

£100 sold - £50 redeemed = £50 outstanding

It looks like you are keeping a subledger for your Gift Vouchers. The balance in your subledger should match the balance in your control account Outstanding Gift Vouchers ... so I'm not sure where £80 is coming from given the information you have presented.

Comments for Gift Voucher Sales

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Oct 05, 2011
 Gift Vouchers Donated
by: Anonymous

Hello,

Can you tell me how it is recorded in the accounts when the owner of the business writes a gift voucher as a donation and no money is received?

Also, if the owner donates a food hamper and no money is exchanged, how would that be recorded?

Thanks for your help.
Oct 08, 2011
 Donating Gift Vouchers
by: Lake

1. Gift voucher donated:

Debit Donations (expense account on the income statement)
Credit Outstanding Gift Vouchers (a current liability on the balance sheet)

2. Food hamper donated:

If the food hamper came from inventory carried by the business, reduce the inventory.

Debit Cost of Goods Sold (reducing inventory)
Credit Inventory

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