Free Accomodations how to account for

Posted by John Pippy on July 14, 2007, 9:07 pm

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Hi,

Looking for advice on how to account for providing free accommodations.

My colleague who owns a bed and breakfast provided free accommodations to a
visiting Chef and paid for his airfare and provided a fee for his services.
I know how to account for the airfare and also for the fees he charged her.
But how do I set up an account to handle the free accommodations she
provided. The free accommodations represent some $720.00 in lost revenue.

Any suggestions,

Thanks

Posted by RebelGraffiti on July 14, 2007, 10:10 pm

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> My colleague who owns a bed and breakfast provided free accommodations to

> a visiting Chef and paid for his airfare and provided a fee for his

> services. I know how to account for the airfare and also for the fees he

> charged her. But how do I set up an account to handle the free

> accommodations she provided. The free accommodations represent some

> $720.00 in lost revenue.

> Any suggestions,

Have you considered using a 100% discount?

--
Tara

Posted by Allan Martin on July 14, 2007, 10:23 pm

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> Hi,

> Looking for advice on how to account for providing free accommodations.

> My colleague who owns a bed and breakfast provided free accommodations to

> a visiting Chef and paid for his airfare and provided a fee for his

> services. I know how to account for the airfare and also for the fees he

> charged her. But how do I set up an account to handle the free

> accommodations she provided. The free accommodations represent some

> $720.00 in lost revenue.

Every day I call up a dozen potential customers. I have been doing this for
over 20 years. Even though I have never been able to close a single sale I
estimate that these lost opportunities resulted in the loss of millions of
dollars. I set up an account called "Lost Sales" and make a journal entry in
QB each and every day to record this expense.

I feel bad that my income is lower than it should be but at least I have
this huge expense to offset my income and save on taxes. Actually I always
show a loss so I never pay any taxes. Life is good. Real good.

> Any suggestions,

> Thanks

Posted by Z1Z on July 15, 2007, 7:56 pm

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> Hi,

> Looking for advice on how to account for providing free accommodations.

> My colleague who owns a bed and breakfast provided free accommodations to

> a visiting Chef and paid for his airfare and provided a fee for his

> services. I know how to account for the airfare and also for the fees he

> charged her. But how do I set up an account to handle the free

> accommodations she provided. The free accommodations represent some

> $720.00 in lost revenue.

Sure. Make a journal entry as follows:

Dr. Chef Expense (or similar)
Cr. Income (whatever account is generally used)

Conceptually, this is the same as if your colleague had written out a check
to the Chef for her fee, and she had written out a check to him for the
accommodations.

Hope this helps.

Posted by HeyBub on July 15, 2007, 8:02 pm

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Z1Z wrote:

> Sure. Make a journal entry as follows:

> Dr. Chef Expense (or similar)

> Cr. Income (whatever account is generally used)

> Conceptually, this is the same as if your colleague had written out a

> check to the Chef for her fee, and she had written out a check to him

> for the accommodations.

> Hope this helps.

Have to be a journal entry; banks don't really like checks for $0.00.