South Africa Accounting for gift voucher

[St. Francis]

My client runs a hairdressing salon. From time to time she donates a gift voucher (value R250 or sometimes R400) as a prize for local sport events, such as bowls and golf tournaments. The winner then comes into the salon to claim the prize - a "hairdo" to the value of the gift voucher. This is not a cash transaction as no cash changes hands. But my client expends hair dressing materials and her labour in providing the service to the voucher winner. So there is a cost to the proprietor. Can this transaction be brought to account and if so, how?

 

[Fidget]

Treat it as an expense in the profit & loss.

 

[St. Francis]

Treat it as an expense in the profit & loss.

Please remember, there is no cash in this transaction. If you debit an expense account, say "Sales Promotion" what is the contra? What account are you going to credit?

 

[Fidget]

It's basically a sale discounted by 100% so the full amount of it is an expense in your P&L.