Note: Before continuing through this document if you have not already gone through the setup process click on the link below:
By reviewing the link above this will ensure that the proper accounts have been setup so that the accounting information reviewed in this document will make sense.
Shown below are a few examples of the entries will be generated when you use the gift card feature.
Example 1: Activate / Add Value to a Gift Card
Note: Sales Tax will not be collected on Gift card sales because there is no actual sale or recognizable revenue when the gift card is sold.
An invoice is created with the follow items:
Gift card: $10.00
Helmet: $160.00 ( with tax of $14.80 )
Total: $184.80 paid for with cash.
Example of entries:
The Gift Card Sale Liability Account Memo will be:
Gift Card Sales - [Customer Name or "Cash"]
for example:
"Gift Card Sales - Smith, Bob"
The Transactions created will be as follows:
The first transaction set shows the Cash Payment $184.80 debiting the Undeposited Funds account and crediting the Parts Deposits account
The second transaction set is for the invoice, it will debit that Parts Deposit account $184.80 and credit the Income account for Helmet $160.00, the Tax Liability account $14.80 and the Gift Card Liability account that we set on the settings page $10.00
Example 2: Redeeming a Gift Card
An invoice was created with the following item:
A MISC part for $100 ( with $6.50 in tax)
Payment methods used:
Cash $50.00
Gift Card: $10.00
Credit Card: $47.00
The entries will show as follows:
The Transactions created will be as follows:
The first transaction set shows the Cash Payment $50.00 debiting the Undeposited Funds account and crediting the Parts Deposits account
The second transaction set shows the Gift Card Payment $10.00 debiting the Gift card Liability account and crediting the Parts Deposits account
The third transaction set shows the Credit Card Payment $46.50 debiting the Undeposited Funds account and crediting the Parts Deposits account
The fourth transaction set shows a debit from the Parts Deposit account $106.50 and then credits to the Parts Income account $100.00 and the Tax Liability account $6.50
Note: Gift Card sales are liabilities and cannot be counted as revenue for the dealership until the gift card is brought in and redeemed. This is why Gift Card sales are not included in the sales and revenue reports at the time they are sold.