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userfali
February 12, 2021
Question

Gift Certificate

  • February 12, 2021
  • 2 replies
  • 0 views

Hello All 

How do I record gift Certificate sale in Quickbooks online through posting a journal entry. I have a parent account Gift certificates Outstanding and Sub account Gift Certificate sold and Redeemed.

if I do a journal entry 

                               Dr.                       Cr 

sold                                                     50

Redeemed                20

Gift certificates

outstanding ( main account) 30    

                                                                                              

 It does not make any changes in the main account.

 

any suggestions 

thanks 

Farzana

 

                                                                                                                                                        

2 replies

LeithG
LeithG
February 12, 2021

Hi userfali:

 

The sale of a Gift Certificate should represent a liability on your balance sheet since you've agreed to owe someone product in future.   

 

'Sale' - both sides on the balance sheet

Debit: Cash (Bank Account)

Credit: Liability: Gift Certitifcates Outstanding

 

Redemption:

Debit: Liability: Gift Certificates Outstanding

Credit: Revenue/Sales

Rebecca R
Rebecca R
February 12, 2021

Hi there userfali,

 

Thanks for being a member of the QuickBooks family. I know how important it is to be able to record your sales as accurately as possible. It looks like @LeithG has given you some great advice, but if you're looking for a further explanation of how to use a journal entry to record this sale, consulting with your accountant will be the best course of action. You can invite your accountant to QuickBooks by navigating to the My Accountant tab and using the Invite field. If you're not working with an accountant just yet, the Find a pro to help button on the same page will take you to our database of QuickBooks-certified accountants who would be more tham happy to give you a hand.

If you'd prefer, there's another way that you can record the sale and redemption of a gift certificate in QuickBooks Online. You'd start by setting up a liability account and by creating a product to represent the gift certificate. Once complete, you'll enter a Sales receipt from the + New menu to represent the sale of the gift certificate. To redeem it you'll enter an Invoice, select the Product/Service being purchased, and enter the quantity. On the second line of the invoice, choose the gift certificate as the Product/Service  and enter the balance of the certificate as a negative amount. If the certificate is more than the total of the invoice, you can enter a Credit Memo to record the remaining balance as credit against their account. The articles I've linked will be helpful resources if this is the route you'd like to take.

 

Feel free to continue using this thread to work this out with the accounting professionals here in our Community as well. They'll also be a great resource. Take care and enjoy your weekend!

U
userfaliAuthor
February 12, 2021

Hi Rebecca 

Thank you.But i do not think i can utilize the process. Cause this Chain Fast Food restaurant.Customer can redeemed gift cards to any location even thought ,customer did not buy from this particular store. So this different. 

i am sure lot of franchisee use QBO online. By any chance do you how the record gift card sale in QBO? 

 

Regards 

Farzana 

LeithG
LeithG
February 12, 2021

Hi Farzana

 

In the case of a chain of fast food restaurants, the general process is the same if slightly more complex.

 

Let's say we have two restaurants, A and B.

 

Restaurant A sells a gift certificate and records a receipt of cash (debit bank account), and credits a gift certificate liability account.

 

Restaurant B has someone redeem a gift certificate and records the revenue from the sale, and debits the gift cards account.

 

How do you clear out the gift card balance in each restaurant?

 

At each month end - or whatever periodic basis you decide - everyone reports the balance in the gift card account and money gets moved around between them.  Typically, this would take place in a parent/corporate entity that collects all overages and redistributes to the restaurants where the gift cards were redeemed.

 

Make sense?

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