How to record non-owned money transaction


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Feb 2, 2022
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First of all, excuse my lack of knowledge in accounting.. I am still learning! I am struggling to know how should I record money that goes into company's bank account temporarily which should be paid out to a third party. A perfect example is Uber, for example, when I as a rider request a ride and the fare is $20, once the trip completes the $20 are deducted from my credit card and goes into Uber's bank account. A week later or so Uber will pay the driver for example $18 and keeps $2 as a revenue.

How should Uber create this journal entry? should it be like this:

Cash20
Accounts Payable18
Revenue2

Also, what is the accounting term that should be used for the $18 ? For example, for the $20, Uber issues an invoice to the customer. What does Uber issue to the driver, or vice versa!, for the $18?

Thanks!
 
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Joined
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Uber would record two transactions. One to recognize the transaction with the client and another for the driver.

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