It may happen that if your clients are physical people and not companies, that you\u2019re giving away coupons at some point. How should you treat them however?<\/p>\n
In essence what a coupon is, it\u2019s a promise that in future, against this coupon you will give away something either for free or with a cheaper price. So in your accounting if it\u2019s anything, it\u2019s an expense.\u00a0<\/p>\n
However, initially, when first giving the coupon either in a newspaper or a magazine or some other place, you don\u2019t account for anything. You wont take on a liability as a promise to give something or an expense. The first and only accounting entry when dealing with coupons comes when one is presented to you.<\/p>\n
Say that a client is making a purchase by you; he is buying something worth of 100 and your coupon says that when buying something worth of at least 50, they will get a discount of 20%. Your accounting entry is as follows:<\/p>\n
Cr Sales revenue 80 (initial price of 100 with 20% discount is 80)<\/p>\n
Db Account receivables 80<\/p>\n
Your sales revenue could be a 100, however, since you gave away a coupon with a promise to give 20% discount, your sales revenue is less than a 100, it\u2019s 20% less.<\/p>\n","protected":false},"excerpt":{"rendered":"
It may happen that if your clients are physical people and not companies, that you\u2019re giving away coupons at some point. How should you treat them however? In essence what a coupon is, it\u2019s a promise that in future, against this coupon you will give away something either for free or with a cheaper price. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,78],"tags":[],"class_list":["post-4588","post","type-post","status-publish","format-standard","hentry","category-2-processes","category-2-8-revenue-and-receivables"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4588","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=4588"}],"version-history":[{"count":1,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4588\/revisions"}],"predecessor-version":[{"id":4589,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4588\/revisions\/4589"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=4588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=4588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=4588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}