User Support Forum

We have a church credit card that gives us a credit to our account annually based on the amount of charges. Since we do not recieve a check to post as income, how do we account for this credit? This last statement the credit was larger than our charges for the month; so we have to post the charges to the expense accounts, but no reduction in the checking account.

Here's a way you could do this:

1). Receipt of credit: Debit the accounts payable account you set up for the credit card and credit a miscellaneous income account.

2). Incurrence of charges: Debit an expense account and credit the accounts payable account for the credit card.

If the credit is more than the charges the accounts payable account will show a debit balance. This debit balance will be liquidated once enough subsequent charges come through.