Do I need to record/report store credit in addition to cash when purchasing items.

I buy secondary market items and resell them at a markup. I know I should record and report all cash purchases of inventory, but sometimes we also give people store credit in addition to, or instead of cash. Do I need to record and report that the same way I do with cash purchases?

Asked on April 20, 2017 under Business Law, Nebraska

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, any exchange of value must be recorded, whether that exchange takes place in the form of cash, in the form of a store credit, in the form of physical goods, in the form of you paying some debt (e.g. if they had previously bought items under a payment plan, and you paid off the balance for them), etc. It is the exchange of value, not the medium, which matters.


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