Personal Finance (Not Investing) • Double-entry accounting newbie questions

Here's how we handle our merchant processing fees. You're technically getting the full $5.00 as income and then paying an expense of $0.15 in merchant fees.

Debit Checking account for $5.00
Credit Donations for $5.00

Debit Merchant Fees for $.15
Credit Checking account for $.15
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As for the scholarship issue, are you doing cash or accrual recording? If cash, you wouldn't record the transaction in the cash account until it is made. If you wanted to accrue the scholarship, you could create a liability account for it. That would show the liability, but not impact the balance in your checking account. You'd still have to be aware that your available balance is less than what your bank statement shows.

Debit Scholarship Expense
Credit Scholarship Liability

Then when the funds are paid, you'd Debit the liability and Credit the cash account.

For our business, we maintain a separate checking account for payroll purposes. When we fund payroll each month we transfer money as required. That way we know what we have in our operating account and don't have to "keep track" of the items that aren't normal A/P going out.

Statistics: Posted by bbqguru — Fri Aug 30, 2024 3:34 pm — Replies 1 — Views 109

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