In this article we take a look at what happens when you have a credit card statement that has a combination of new charges and a credit for a previous charge.
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In month one, the agency received the following American Express Statement:
| Office Supply Store | $325.00 |
| ABC Printing | $75.00 |
| ACME Parking | $250.00 |
| Light Company | $45.00 |
| Total Charges: | $695.00 |
The journal entry below would be created when the statement is paid:
| Account | Debit | Credit |
| Checking | 695.00 | |
| Office Supplies | 325.00 | |
| Printing Expense | 75.00 | |
| Parking | 250.00 | |
| Utilities | 45.00 |
In the next month, if the agency received the following statement, since there is no check to be issued, create a journal entry entering a debit for each new charge.
| Office Supply Store | -$325.00 |
| ACME Parking | $250.00 |
| Light Company | $45.00 |
| Total Charges: | $-30.00 |
In order for the Debits and Credits to equal, enter a credit that is equal to the debits. In the previous month, Office Supplies was debited when the charge was made. The credit this month would be to Office Supplies. We do not credit the full $325.00, just enough to balance the Debits and the Credits. $30.00 is carried over to the next month, so we only need to create a credit that is equal to the current charges.
This allows the journal entry to be saved, current charges to be accounted for, and the $30.00 credit will carry over to the next month.
In the next month, if the following American Express Statement is received:
| ACME Parking | $250.00 |
| Light Company | $45.00 |
| Total Charges: | $295.00 |
| Previous Balance: | $-30.00 |
| Total Due: | $265.00 |
To pay the $265.00, but account for $295.00 in charges, enter a Payment Made for $265.00. When prompted for the journal entry, debit the new charges and enter a credit for $30.00 to Office Supplies.
Please Note: The recommendations contained in this document are designed to allow your Trams Back Office program produce information in a manner which Trams and ClientBase Products and Services believe to be useful to a travel agency. However, Trams and ClientBase Products and Services, make no representation or warranty that the recommendations, if applied, will conform to generally accepted accounting and auditing practices or principals or to any type of financial reporting requirements. To the extent that any reports generated by Trams Back Office are used for reporting purposes, including tax reporting, we strongly suggest that you review these recommendations with your certified public accountant or tax advisor as applicable.