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Accounting entry for gift given

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The applicable taxes will be deducted from the employees paycheck.
If the business is unable to estimate the breakage amount, the revenue for the unused portion of the gift cards is recognized when the likelihood of the customer redeeming the gift card becomes remote.
Refer to the, human Resources Policy: Staff Recognition Awards and Gifts for additional information.
Payroll taxes AND fringe benefits.Suppose the business sells gift cards for the amount of 1,500, the deferred revenue journal entries to record the sale are as follows: Accounting for gift card transactions sales.In addition, they should notify the employee if he/she will be responsible for the taxes.Departments have the following options regarding the payment of the related payroll taxes and fringe benefit assessment.

Breakage: Some gift cards are not redeemed and expire (referred to as breakage).
If the gift is usable or has a material value addition to the business like a fixed asset machinery or painting it would be recognized in an asset of approprite category hence a debit, In terms of credit several approaches are acceptable recognizing.
There are three significant stages in the life of gift cards which need to be considered when processing transactions as follows: Sale: The gift cards are sold to the customer and the business has an obligation to supply goods in the future.
The cards are sold for cash and, in effect, the customer is prepaying for the goods.
Suppose a customer redeems a gift card for the amount of 400, the journal to record the gift card redemption is as follows: Accounting for gift card transactions redemption.Gift Cards Sale, gift cards are sold to the customers (usually in return for cash and the business must establish the liability for its obligation to supply the customers with goods in the future.Account, debit, credit Gift card liability 100 Revenue 100 Total 100 100 In the above example, 400 was redeemed and the estimated breakage revenue, based on this redemption is 100.The revenue of 100 can now be recognized and this amount is transferred from the gift card liability account to the income statement revenue account.Other Considerations, resources,.


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