I have a a client who owns a clothing shop. As a way of advertising she has given away 4 £15 gift vouchers for her shop as a competition prize on a local radio station. I was just wondering if these can be claimed as expenses or not? If yes what sort would they be? Many thanks
I would put them down as a discount against the selling price when they are redeemed.
At the moment she does not actually have an expense. Although if you are being absolutely accurate, she does have a future liability to honour, so maybe record a nominal transaction say debit a reserves account £60 and credit a liabilities account £60 for voucher redemption.
When the vouchers are redeemed
DR Voucher Liability a/c (bal sheet current liability a/c) DR Discount Given (P&L expense) CR Sales (P&L income) CR Voucher Reserve a/c (bal sheet capital a/c)
