Please help with a journal entry

May 17, 2005 3 Replies

Rate this thread:

sbernelli 21 years ago

I am definitely not an accountant but I am trying to assist a small jewelry store with their books. (They use Peachtree.) The store printed two types of coupons: one version says something like "10% off your next purchase" and one version that says "$50 off your next purchase" and I'm not sure what the journal entry would be after someone uses each type of coupon. Wouldn't the journal entry be the same for both coupons? I would just need to know the dollar amount represented by the

10%?

Also, sometimes the coupons are given to new employees as a "signing bonus". Would the journal entries be the same as above?

Thanks!

Sara

Vote

John 21 years ago

the entry would depend on how sales are recorded in the general ledger or cash register system but if you just want to know the financial effect of the discounts "after the fact" you could total up the coupons each month and make an entry to debit a separate sales discounts account (contra account) and credit sales.

Vote

Bill Lentz 21 years ago

I'm a controller for a jewelry store, and we do similar promotions. We just record the sale net, and keep the coupons. We'll add them up to see how many were used at the end of the period.

The technically correct entry would be to record as follows:

Cash $90 Sales Discount 10 Sales $100

My entry is just:

Cash $90 Sales $90

There is no entry when the coupons are given away, only when they are used.

Best regards Bill

Vote

David Jensen 21 years ago

On Tue, 17 May 2005 09:44:24 -0500, in alt.accounting Bill Lentz wrote in :

Some states require you to calculate the tax based on the pre-coupon price, so this may affect the way you calculate revenues for those purposes.

Vote

Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required