Hello!I am a MICRO business, so I have taken on the duties of my own bookkeeping. I am an Herbalife Distributor and am running a Weight Loss Challenge. People pay money to get into the challenge, and that money is paid out to the winners of the challenge at the end.I am using a Dome Simplified Monthly Bookkeeping Record which operates on a numbered accounting system. My question is relatively simple: Should I track the money I have collected from the participants as Accounts Receivable, and if so, how would I track the pay-outs? (I can use a blank account for that if I need to, but I'm most concerned about the money coming in.)Thank you! Any help that anyone can provide will be GREATLY appreciated!
Not an accountant - but, if the money that comes in for the contest is ear marked for the contest winner - then these funds are a liability to your business and not an asset like accounts receivables.
Again not an accountant but it would seem that the cash that comes in would go to an equity account offset by a liability - then reserved when paid out.
phanio | Contributor | 6/12/2011 - 7:16 pm
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