Free Accomodations how to account for

I'm not Allan, but in an accrual based company you need to create a credit memo posted to Bad Debt to write off the uncollectible. In a cash based company you would void the sales invoice to write it off the books. It never it the books so voiding it is acceptable.

Allan would base his answer on how the financials were prepared, GAAP or some other method. If GAAP then the use of an allowance for doubtful accounts would be in order, if not, then an offset to sales or a charge to bad debt expense does the trick. Though I would favor the charge to bad debts.

As far as the general thread is concerned, there have been studies made of the hospitality industry that bring to light the common practices in the industry concerning barter transactions. The B&B would be well advised to use these as a guide.

You bring up an interesting point in asking if the food were any good. If there was indeed a barter exchange and the food sucked then a 1099er for $700.00 would not be in order. Perhaps $1.00 is all that it was worth.