Institute of Certified Bookkeepers
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Accounting for "cash prize" given to client's customer

  • Member in Practice
  • Practice Certificate
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  • # 118204

Hi all,

My client held a competition for its customers where the winner won $500 cheque (cash). I'd like to confirm the accounting entry for this transaction is debit marketing expense - straight forward, no GST. Is this correct? 

And when should this cost be realised in accounting? Is it when the cheque is given out or when it is cashed?

Thank you.

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