Accounting & Bookkeeping & Small Business Forum

[Guest]

I am new at my job and the person that trained me is gone. I have two questions:
1. The first one is travel expense. The manager had me enter a check for 500.00, and I charged it to travel expense. The employees gave me all of their receipts and 109.20 cash back. My questions is how do I enter this in the computer?

2. I have a receipt for a contribution to a church, it was some equipment. We have a contribution account in our chart of accounts. Which one do I credit and which one do I debit?

Please send me the answers as soon as possible. I will have to enter these before Sept. 1.

Thank You,
Wanda Williams

[Guest]

Travel:
Best to charge the original $500 to an asset account called something like "Travel Advances". However, if your company's practice is to use the expense account so be it.

You will have a cash receipt for $109.20. Your entry will be:

Dr Cash 109.20
CR Travel Expenses 109.20

As the employee only spent $390.80 for travel you want the Travel Expense account to reflect that expense not a $500 expense. Therefore the credit to the travel expense account reduces the $500 debit you put there when you issued the advance to $390.80, the actual travel expenses.

Equipment:

With a journal entry:
DR Non-cash charitable contribution (for the difference between the two entries below)

CR Equipment for original cost of the asset(asset balance sheet account, assuming this is where the donated equipment was originally charged to when purchased)

DR Accumulated Depreciation, Equipment for the amount of depreciation taken on the equipment through the date of donation.

If the equipment was expensed at the time of purchase then you should ask your supervisor what the company practice is for recording such donations. Generally the receipt would be kept and given to the tax preparer at year and no entry made.

[Guest]

BETH I AM IN AGREEMENT WITH YOUR ENTRY EXCEPT FOR ONE MINOR POINT. ON THE CONTRIBUTION OF THE COMPUTER, THE DR SHOULD BE TO OWNER EQUITY INSTEAD OF NON-CASH CHARITABLE DEDUCTION. CHARITABLE DEDUCTIONS CAN BE TAKEN ONLY ON A SCHEDULE A NEVER ON A SCHEDULE C BUSINESS RETURN.
BY TAKING IT AS A BUSINESS DEDUCTION, YOU WOULD UNDERSTATE YOUR INCOME FOR THE PERIOD