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July 16, 2008

Where do credit card payments get recorded?

The payment to the credit card company will result in a decrease in the Cash account. This is achieved by crediting Cash. The debit amount or amounts will depend on whether the credit card transactions were previously entered in the accounting records.

For example, if the credit card purchases had not been previously entered, then there will be debits to the accounts that are appropriate for the charges. Let’s assume that one credit card transaction was for an enrollment fee for a seminar. That amount might be debited to Seminars & Conventions Expense. If the other credit card transactions were for airline tickets and hotels, you might debit the account Travel Expenses for those amounts.

However, it is possible that the credit card bill was recorded in the accounts prior to paying the credit card bill. Using the example above, the accountant may have debited Seminars & Convention Expenses and Travel Expense, and credited Credit Card Payable at the time the bill or statement was received. If the credit card bill is paid two weeks later, the payment will be recorded with a debit to Credit Card Payable and a credit to Cash. 

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Comments

9 Responses to “Where do credit card payments get recorded?”

  1. Saeed on July 17th, 2008 12:03 pm

    Define Finance?
    Define Accounting?
    What is difference between Finance & Accounting?
    (I dont know the answer, who know the actual answer kindly inform me, thanks)

  2. Micheal on July 18th, 2008 2:25 am

    Hi,

    Thanks for your information, Actually one of the my friend is every time asking me where did our credit card payments get recorded?, So I inform to him about your site.

  3. jane on July 25th, 2008 3:30 am

    treasury management in a bank

  4. rizwan on August 11th, 2008 12:23 am

    I have one question is that.
    What is to be considered an Employee of a company? CURRENT ASSET or FIXED ASSET or Something else???

  5. Rajesh Sharma on February 5th, 2009 5:19 am

    Sir,
    I wants to Knowabout basic accounting
    and format of journal vouchar, purchase voucher,cash book,trial balance,sale voucher.
    plz send these items in a file.

  6. Rajesh Sharma on February 5th, 2009 5:23 am

    I have one question.
    Basic accounting
    and format of journal vouchar, purchase voucher,cash book,trial balance,sale voucher.

  7. sima on February 6th, 2009 3:52 am

    is the bank in charge for the first transaction for the payment through the credit card system to be acceptable, to check if there is a sum value to equivalent the sum payables

  8. carina on September 25th, 2009 7:45 am

    Hi,
    How to record credit card payemts for hotel (mmy employee was in business related seminar and later my bookkeeper wrote a chq for that employee)? My bookkeeper Debited Drawing account and Credited Cash Bank account. Is that right transaction?
    Thanks
    Carina

  9. ACoach on September 25th, 2009 9:25 am

    If the seminar was a necessary business transaction, the cost should be charged/debited to a company expense such as Business Seminars, Training and Seminars, Continuing Education, Employee Development, etc.

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