What journal entries to use to document a free gift card that was given as the result of a cash purchase. Assuming a liability is being created after the initial transaction. Also, what FASB pronouncements are in existance that would back up your answer? Any help would be greatly appreciated.
Saturday 19th May 2012
Gift Card News- Golfology gift card holders left wondering if cards are worthless - Enterprise News
- Fee Free Gift Card Promotion - USA TODAY (blog)
- Photo Contest Worth $400 in DonorsChoose.org Gift Cards Announced by TeachHUB.com - Houston Chronicle
- Senate Budget Committee repeals 2010 gift card law and bans retailer fees - The Star-Ledger - NJ.com
- Georgia Woman Arrested for Having Fake Credit, Gift Cards - NewsTalk 1010 WCSI
What accounting procedures to use with a free gift card?
Related Posts
Tags: forever, gift, novel, Roaches, Valentine's
The $10 is a contingent liability. Your journal entry would to credit the contingent liability account and debit the contingent loss (or expense) account.
You can only do this if it is probable that the gift cards will be used and if you can reasonably estimate how many will be redeemed.
See FAS 5.
Hope that helps. :0)