{"id":155,"date":"2024-09-06T16:46:58","date_gmt":"2024-09-06T16:46:58","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/record-sales-and-purchases-by-credit-card\/"},"modified":"2024-09-12T17:48:11","modified_gmt":"2024-09-12T17:48:11","slug":"record-sales-and-purchases-by-credit-card","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/record-sales-and-purchases-by-credit-card\/","title":{"raw":"Record Sales and Purchases by Credit Card","rendered":"Record Sales and Purchases by Credit Card"},"content":{"raw":"<section class=\"textbox learningGoals\" aria-label=\"Learning Goals\">\r\n<ul>\r\n \t<li>Differentiate between three methods of recording sales by credit card<\/li>\r\n \t<li>Demonstrate recording purchases by credit card<\/li>\r\n<\/ul>\r\n<\/section>&nbsp;\r\n<h2>Record Sales by Credit Card<\/h2>\r\nA company\u2019s accounting procedures for recording credit card sales will depend on how the credit card or charge card transaction is being posted to the bank (which depends on how you set up your service) and how the company then decides to make the entry. There are three possibilities.\r\n<h3>Net Method<\/h3>\r\nAssume NeatNiks accepted a credit card on December 14 for a $1,000 cleaning job and the service charge is three percent of sales. The $970 deposit shows up in the bank the next day. The entry to record this deposit is:\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"col\">Date<\/th>\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Post. Ref.<\/th>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Dec 15<\/th>\r\n<td>Checking account<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">970.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\r\n<td>Bank Fees<\/td>\r\n<td><\/td>\r\n<td class=\"r\">30.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Service Revenue<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">1,000.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\r\n<td>To record credit card deposit<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<h3>Gross Method<\/h3>\r\nAssume NeatNiks accepted a charge card on December 14 for a $1,000 cleaning job and the service charge is three percent of sales. The $100 deposit shows up in the bank the next day, and in January, during the bank reconciliation process, Nick discovers a $30 charge from VISA for the service fee. The entry to record the deposit is:\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"col\">Date<\/th>\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Post. Ref.<\/th>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Dec 15<\/th>\r\n<td>Checking account<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">1,000.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Service Revenue<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">1,000.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\r\n<td>To record credit card deposit<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nIn January, Nick will backdate the service charge to have it show up in December (following the matching principle):\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"col\">Date<\/th>\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Post. Ref.<\/th>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Dec 31<\/th>\r\n<td>Bank Fees<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">30.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 31<\/span><\/th>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Checking Account<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">30.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 31<\/span><\/th>\r\n<td>To record credit card fees for Dec.<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nYou may find your credit card service provider charges both a per-transaction fee you could record using the net method and a monthly fee you would record using the gross method. In addition, in our example, we posted the card fee to our already existing Bank Fees account, but if we wanted to keep track of charge card fees separately in order to see how much we are spending monthly, quarterly, or annually on bank card fees, we could set up a separate account to track them.\r\n<h3>Accounts Receivable Method<\/h3>\r\nAgain, this method depends on the arrangement you have with the bank and other credit card servicing vendors.\r\n\r\nThe entry would look like this at the time the sale was made:\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"col\">Date<\/th>\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Post. Ref.<\/th>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Dec 15<\/th>\r\n<td>Accounts Receivable<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">1,000.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Service Revenue<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">1,000.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\r\n<td>To record charge card sales<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nThis method would be appropriate if you had to bill the credit card or charge card company periodically. When you receive the payment in January, you would make the following entry:\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"col\">Date<\/th>\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Post. Ref.<\/th>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Dec 15<\/th>\r\n<td>Checking account<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">970.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\r\n<td>Bank Fees<\/td>\r\n<td><\/td>\r\n<td class=\"r\">30.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Accounts Receivable<\/td>\r\n<td><\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">1,000.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\r\n<td>To record receipt of charge card sales, net of fees<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nAs an accountant, you have to figure out what entries make the most sense for each type of transaction using what you learn in this course.\r\n\r\n<section class=\"textbox tryIt\" aria-label=\"Try It\">[ohm2_question hide_question_numbers=1]25149[\/ohm2_question]\r\n[ohm2_question hide_question_numbers=1]25150[\/ohm2_question]<\/section>\r\n<h2>Record Purchases by Credit Card<\/h2>\r\nMany business-to-business (B2B) transactions are based on credit. For instance, if Home Depot needs 1,000 board feet of lumber from Boise Cascade, the purchasing agent creates a purchase order (PO) and sends it to the vendor (Boise Cascade, in this example). The vendor creates a sales order, sends it to the fulfillment department (probably the warehouse folks), and then someone in the warehouse fills the order, puts it on a truck, creates an invoice (bill), and a packing slip for the shipment, and ships it. Home Depot\u2019s receiving department (loading dock folk) gets the shipment and matches it to the packing slip, puts the inventory on the floor, and sends the packing slip up to accounts payable (AP). The AP clerk makes sure the packing slip matches the invoice and then processes the whole thing (often called a voucher) for payment. The terms usually require Home Depot to pay within 30 days and there is often a discount for paying early, maybe up to two percent. We'll talk more about this later when we discuss accounts payable.\r\n\r\nFor many purchases, such as supplies and travel, certain members of the company may have company credit cards. In that case, the purchases may not show up as transactions until the bookkeeper receives the credit card statement, which may be in the next accounting period. If the amounts are immaterial according to the company\u2019s subjective assessment of that term, recording June expenses in July may be acceptable. However, the proper way to record the expenses would be to accrue them to the proper period.\r\n\r\nMost computer applications allow you to create a credit card account and to enter transactions as they occur. Take these January transactions, for example:\r\n<table class=\"fin-table acctstatement\"><caption>First World Bank: NeatNiks<\/caption>\r\n<tbody>\r\n<tr>\r\n<th colspan=\"4\">Statement 1\/31\/20XX<\/th>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"4\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th colspan=\"4\">First World Bank VISA<\/th>\r\n<\/tr>\r\n<tr>\r\n<td class=\"r\" colspan=\"3\"><strong>Beginning balance<\/strong><\/td>\r\n<td class=\"r\"><strong>$427.89<\/strong><\/td>\r\n<\/tr>\r\n<tr class=\"u-sr-only\">\r\n<th scope=\"col\">Date<\/th>\r\n<th colspan=\"2\" scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Amount<\/th>\r\n<\/tr>\r\n<tr>\r\n<td class=\"r\">1\/20\/20XX<\/td>\r\n<td class=\"r\" colspan=\"2\">Domino's Pizza<\/td>\r\n<td class=\"r\">$18.66<\/td>\r\n<\/tr>\r\n<tr>\r\n<td class=\"r\">1\/22\/20XX<\/td>\r\n<td class=\"r\" colspan=\"2\">Target<\/td>\r\n<td class=\"r\">$452.32<\/td>\r\n<\/tr>\r\n<tr>\r\n<td class=\"r\">1\/22\/20XX<\/td>\r\n<td class=\"r\" colspan=\"2\">Walmart<\/td>\r\n<td class=\"r\">$88.99<\/td>\r\n<\/tr>\r\n<tr>\r\n<td class=\"r\">1\/26\/20XX<\/td>\r\n<td class=\"r\" colspan=\"2\">NAPA auto parts<\/td>\r\n<td class=\"r\">$54.54<\/td>\r\n<\/tr>\r\n<tr>\r\n<td class=\"r\">1\/31\/20XX<\/td>\r\n<td class=\"r\" colspan=\"2\">Finance charge<\/td>\r\n<td class=\"r\">$12.49<\/td>\r\n<\/tr>\r\n<tr>\r\n<td class=\"r\" colspan=\"3\"><strong>Statement balance<\/strong><\/td>\r\n<td class=\"r\"><strong>$1,054.89<\/strong><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"4\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td class=\"r\" colspan=\"3\"><em>Available balance<\/em><\/td>\r\n<td class=\"r\"><em>$3,866.46<\/em><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nEach charge should be accounted for as it occurs and properly documented:\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"col\">Date<\/th>\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Post. Ref.<\/th>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Jan 20<\/th>\r\n<td>Meals and Entertainment<\/td>\r\n<td class=\"r\">576<\/td>\r\n<td class=\"r\">18.66<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Jan 20<\/span><\/th>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0First World Bank VISA Payable<\/td>\r\n<td class=\"r\">210<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">18.66<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Jan 20<\/span><\/th>\r\n<td>To record staff meeting meal<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nWhen the credit card balance is paid, the entry would look like this:\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"col\">Date<\/th>\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Post. Ref.<\/th>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>20--<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Feb 10<\/th>\r\n<td>First World Bank VISA Payable<\/td>\r\n<td class=\"r\">210<\/td>\r\n<td class=\"r\">427.89<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Feb 10<\/span><\/th>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Checking Account<\/td>\r\n<td class=\"r\">110<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">427.89<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Feb 10<\/span><\/th>\r\n<td>To record payment of balance due on VISA<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"5\"><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nAnd then the GL will look like this:\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\">\r\n<div style=\"text-transform: uppercase;\">General Ledger<\/div>\r\n<div><span style=\"float: left;\">Account: First World Bank VISA Payable<\/span><span style=\"float: right;\">Account No. 210<\/span><\/div>\r\n<\/caption>\r\n<thead>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<tr style=\"text-transform: uppercase;\">\r\n<th class=\"c\" colspan=\"2\" rowspan=\"2\" scope=\"col\">Date<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Item<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Post. Ref.<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Debit<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Credit<\/th>\r\n<th class=\"c\" colspan=\"2\" scope=\"col\">Balance<\/th>\r\n<\/tr>\r\n<tr style=\"text-transform: uppercase;\">\r\n<th class=\"c\" scope=\"col\">Debit<\/th>\r\n<th class=\"c\" scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td class=\"l\">Bal fwd<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r\">427.89<\/td>\r\n<\/tr>\r\n<tr>\r\n<td class=\"l\">Jan<\/td>\r\n<td class=\"l\">20<\/td>\r\n<td><\/td>\r\n<td>GJ101<\/td>\r\n<td><\/td>\r\n<td class=\"r\">18.66<\/td>\r\n<td><\/td>\r\n<td class=\"r\">446.55<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Jan<\/span><\/th>\r\n<td class=\"l\">22<\/td>\r\n<td><\/td>\r\n<td>GJ101<\/td>\r\n<td><\/td>\r\n<td class=\"r\">452.32<\/td>\r\n<td><\/td>\r\n<td class=\"r\">898.87<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Jan<\/span><\/th>\r\n<td class=\"l\">22<\/td>\r\n<td><\/td>\r\n<td>GJ101<\/td>\r\n<td><\/td>\r\n<td class=\"r\">88.99<\/td>\r\n<td><\/td>\r\n<td class=\"r\">987.86<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Jan<\/span><\/th>\r\n<td class=\"l\">26<\/td>\r\n<td><\/td>\r\n<td>GJ101<\/td>\r\n<td><\/td>\r\n<td class=\"r\">54.54<\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,042.40<\/td>\r\n<\/tr>\r\n<tr>\r\n<th><span class=\"u-sr-only\">Jan<\/span><\/th>\r\n<td class=\"l\">31<\/td>\r\n<td><\/td>\r\n<td>GJ101<\/td>\r\n<td><\/td>\r\n<td class=\"r\">12.49<\/td>\r\n<td><\/td>\r\n<td class=\"r\">1,054.89<\/td>\r\n<\/tr>\r\n<tr>\r\n<td class=\"l\">Feb<\/td>\r\n<td class=\"l\">10<\/td>\r\n<td><\/td>\r\n<td>GJ101<\/td>\r\n<td class=\"r\">427.89<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r\">627.00<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<tbody>\r\n<tr aria-hidden=\"true\">\r\n<td colspan=\"8\"><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nThe GL should be reconciled to the VISA statement at the end of the month. In this case, you can see how the GL balance on January 31 of $1,054.89 matches the statement balance, so the reconciliation would be easy.\r\n\r\nCredit cards, like petty cash, can be abused. Unlike petty cash, which is usually a fairly small amount of money, credit card charges can add up quickly and get out of control if not carefully monitored. In the next section, we\u2019ll talk about internal controls on credit cards.\r\n\r\n<section class=\"textbox tryIt\" aria-label=\"Try It\">[ohm2_question hide_question_numbers=1]25295[\/ohm2_question][ohm_question hide_question_numbers=1]204221[\/ohm_question]<\/section>","rendered":"<section class=\"textbox learningGoals\" aria-label=\"Learning Goals\">\n<ul>\n<li>Differentiate between three methods of recording sales by credit card<\/li>\n<li>Demonstrate recording purchases by credit card<\/li>\n<\/ul>\n<\/section>\n<p>&nbsp;<\/p>\n<h2>Record Sales by Credit Card<\/h2>\n<p>A company\u2019s accounting procedures for recording credit card sales will depend on how the credit card or charge card transaction is being posted to the bank (which depends on how you set up your service) and how the company then decides to make the entry. There are three possibilities.<\/p>\n<h3>Net Method<\/h3>\n<p>Assume NeatNiks accepted a credit card on December 14 for a $1,000 cleaning job and the service charge is three percent of sales. The $970 deposit shows up in the bank the next day. The entry to record this deposit is:<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr>\n<th scope=\"col\">Date<\/th>\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Post. Ref.<\/th>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Dec 15<\/th>\n<td>Checking account<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">970.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\n<td>Bank Fees<\/td>\n<td><\/td>\n<td class=\"r\">30.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Service Revenue<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,000.00<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\n<td>To record credit card deposit<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3>Gross Method<\/h3>\n<p>Assume NeatNiks accepted a charge card on December 14 for a $1,000 cleaning job and the service charge is three percent of sales. The $100 deposit shows up in the bank the next day, and in January, during the bank reconciliation process, Nick discovers a $30 charge from VISA for the service fee. The entry to record the deposit is:<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr>\n<th scope=\"col\">Date<\/th>\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Post. Ref.<\/th>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Dec 15<\/th>\n<td>Checking account<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,000.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Service Revenue<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,000.00<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\n<td>To record credit card deposit<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>In January, Nick will backdate the service charge to have it show up in December (following the matching principle):<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr>\n<th scope=\"col\">Date<\/th>\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Post. Ref.<\/th>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Dec 31<\/th>\n<td>Bank Fees<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">30.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 31<\/span><\/th>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Checking Account<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">30.00<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 31<\/span><\/th>\n<td>To record credit card fees for Dec.<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>You may find your credit card service provider charges both a per-transaction fee you could record using the net method and a monthly fee you would record using the gross method. In addition, in our example, we posted the card fee to our already existing Bank Fees account, but if we wanted to keep track of charge card fees separately in order to see how much we are spending monthly, quarterly, or annually on bank card fees, we could set up a separate account to track them.<\/p>\n<h3>Accounts Receivable Method<\/h3>\n<p>Again, this method depends on the arrangement you have with the bank and other credit card servicing vendors.<\/p>\n<p>The entry would look like this at the time the sale was made:<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr>\n<th scope=\"col\">Date<\/th>\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Post. Ref.<\/th>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Dec 15<\/th>\n<td>Accounts Receivable<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,000.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Service Revenue<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,000.00<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\n<td>To record charge card sales<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>This method would be appropriate if you had to bill the credit card or charge card company periodically. When you receive the payment in January, you would make the following entry:<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr>\n<th scope=\"col\">Date<\/th>\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Post. Ref.<\/th>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Dec 15<\/th>\n<td>Checking account<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">970.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\n<td>Bank Fees<\/td>\n<td><\/td>\n<td class=\"r\">30.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Accounts Receivable<\/td>\n<td><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,000.00<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Dec 15<\/span><\/th>\n<td>To record receipt of charge card sales, net of fees<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>As an accountant, you have to figure out what entries make the most sense for each type of transaction using what you learn in this course.<\/p>\n<section class=\"textbox tryIt\" aria-label=\"Try It\"><iframe loading=\"lazy\" id=\"ohm25149\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=25149&theme=lumen&iframe_resize_id=ohm25149&source=tnh\" width=\"100%\" height=\"150\"><\/iframe><br \/>\n<iframe loading=\"lazy\" id=\"ohm25150\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=25150&theme=lumen&iframe_resize_id=ohm25150&source=tnh\" width=\"100%\" height=\"150\"><\/iframe><\/section>\n<h2>Record Purchases by Credit Card<\/h2>\n<p>Many business-to-business (B2B) transactions are based on credit. For instance, if Home Depot needs 1,000 board feet of lumber from Boise Cascade, the purchasing agent creates a purchase order (PO) and sends it to the vendor (Boise Cascade, in this example). The vendor creates a sales order, sends it to the fulfillment department (probably the warehouse folks), and then someone in the warehouse fills the order, puts it on a truck, creates an invoice (bill), and a packing slip for the shipment, and ships it. Home Depot\u2019s receiving department (loading dock folk) gets the shipment and matches it to the packing slip, puts the inventory on the floor, and sends the packing slip up to accounts payable (AP). The AP clerk makes sure the packing slip matches the invoice and then processes the whole thing (often called a voucher) for payment. The terms usually require Home Depot to pay within 30 days and there is often a discount for paying early, maybe up to two percent. We&#8217;ll talk more about this later when we discuss accounts payable.<\/p>\n<p>For many purchases, such as supplies and travel, certain members of the company may have company credit cards. In that case, the purchases may not show up as transactions until the bookkeeper receives the credit card statement, which may be in the next accounting period. If the amounts are immaterial according to the company\u2019s subjective assessment of that term, recording June expenses in July may be acceptable. However, the proper way to record the expenses would be to accrue them to the proper period.<\/p>\n<p>Most computer applications allow you to create a credit card account and to enter transactions as they occur. Take these January transactions, for example:<\/p>\n<table class=\"fin-table acctstatement\">\n<caption>First World Bank: NeatNiks<\/caption>\n<tbody>\n<tr>\n<th colspan=\"4\">Statement 1\/31\/20XX<\/th>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"4\"><\/td>\n<\/tr>\n<tr>\n<th colspan=\"4\">First World Bank VISA<\/th>\n<\/tr>\n<tr>\n<td class=\"r\" colspan=\"3\"><strong>Beginning balance<\/strong><\/td>\n<td class=\"r\"><strong>$427.89<\/strong><\/td>\n<\/tr>\n<tr class=\"u-sr-only\">\n<th scope=\"col\">Date<\/th>\n<th colspan=\"2\" scope=\"col\">Description<\/th>\n<th scope=\"col\">Amount<\/th>\n<\/tr>\n<tr>\n<td class=\"r\">1\/20\/20XX<\/td>\n<td class=\"r\" colspan=\"2\">Domino&#8217;s Pizza<\/td>\n<td class=\"r\">$18.66<\/td>\n<\/tr>\n<tr>\n<td class=\"r\">1\/22\/20XX<\/td>\n<td class=\"r\" colspan=\"2\">Target<\/td>\n<td class=\"r\">$452.32<\/td>\n<\/tr>\n<tr>\n<td class=\"r\">1\/22\/20XX<\/td>\n<td class=\"r\" colspan=\"2\">Walmart<\/td>\n<td class=\"r\">$88.99<\/td>\n<\/tr>\n<tr>\n<td class=\"r\">1\/26\/20XX<\/td>\n<td class=\"r\" colspan=\"2\">NAPA auto parts<\/td>\n<td class=\"r\">$54.54<\/td>\n<\/tr>\n<tr>\n<td class=\"r\">1\/31\/20XX<\/td>\n<td class=\"r\" colspan=\"2\">Finance charge<\/td>\n<td class=\"r\">$12.49<\/td>\n<\/tr>\n<tr>\n<td class=\"r\" colspan=\"3\"><strong>Statement balance<\/strong><\/td>\n<td class=\"r\"><strong>$1,054.89<\/strong><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"4\"><\/td>\n<\/tr>\n<tr>\n<td class=\"r\" colspan=\"3\"><em>Available balance<\/em><\/td>\n<td class=\"r\"><em>$3,866.46<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Each charge should be accounted for as it occurs and properly documented:<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr>\n<th scope=\"col\">Date<\/th>\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Post. Ref.<\/th>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Jan 20<\/th>\n<td>Meals and Entertainment<\/td>\n<td class=\"r\">576<\/td>\n<td class=\"r\">18.66<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Jan 20<\/span><\/th>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0First World Bank VISA Payable<\/td>\n<td class=\"r\">210<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">18.66<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Jan 20<\/span><\/th>\n<td>To record staff meeting meal<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>When the credit card balance is paid, the entry would look like this:<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\"><span style=\"text-transform: uppercase;\">Journal<\/span><span style=\"float: right;\">Page 101<\/span><\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<tr>\n<th scope=\"col\">Date<\/th>\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Post. Ref.<\/th>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>20&#8211;<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Feb 10<\/th>\n<td>First World Bank VISA Payable<\/td>\n<td class=\"r\">210<\/td>\n<td class=\"r\">427.89<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Feb 10<\/span><\/th>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Checking Account<\/td>\n<td class=\"r\">110<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">427.89<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Feb 10<\/span><\/th>\n<td>To record payment of balance due on VISA<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr aria-hidden=\"true\">\n<td colspan=\"5\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>And then the GL will look like this:<\/p>\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\">\n<\/caption>\n<thead>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<tr style=\"text-transform: uppercase;\">\n<th class=\"c\" colspan=\"2\" rowspan=\"2\" scope=\"col\">Date<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Item<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Post. Ref.<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Debit<\/th>\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Credit<\/th>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Balance<\/th>\n<\/tr>\n<tr style=\"text-transform: uppercase;\">\n<th class=\"c\" scope=\"col\">Debit<\/th>\n<th class=\"c\" scope=\"col\">Credit<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td class=\"l\">Bal fwd<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td class=\"r\">427.89<\/td>\n<\/tr>\n<tr>\n<td class=\"l\">Jan<\/td>\n<td class=\"l\">20<\/td>\n<td><\/td>\n<td>GJ101<\/td>\n<td><\/td>\n<td class=\"r\">18.66<\/td>\n<td><\/td>\n<td class=\"r\">446.55<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Jan<\/span><\/th>\n<td class=\"l\">22<\/td>\n<td><\/td>\n<td>GJ101<\/td>\n<td><\/td>\n<td class=\"r\">452.32<\/td>\n<td><\/td>\n<td class=\"r\">898.87<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Jan<\/span><\/th>\n<td class=\"l\">22<\/td>\n<td><\/td>\n<td>GJ101<\/td>\n<td><\/td>\n<td class=\"r\">88.99<\/td>\n<td><\/td>\n<td class=\"r\">987.86<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Jan<\/span><\/th>\n<td class=\"l\">26<\/td>\n<td><\/td>\n<td>GJ101<\/td>\n<td><\/td>\n<td class=\"r\">54.54<\/td>\n<td><\/td>\n<td class=\"r\">1,042.40<\/td>\n<\/tr>\n<tr>\n<th><span class=\"u-sr-only\">Jan<\/span><\/th>\n<td class=\"l\">31<\/td>\n<td><\/td>\n<td>GJ101<\/td>\n<td><\/td>\n<td class=\"r\">12.49<\/td>\n<td><\/td>\n<td class=\"r\">1,054.89<\/td>\n<\/tr>\n<tr>\n<td class=\"l\">Feb<\/td>\n<td class=\"l\">10<\/td>\n<td><\/td>\n<td>GJ101<\/td>\n<td class=\"r\">427.89<\/td>\n<td><\/td>\n<td><\/td>\n<td class=\"r\">627.00<\/td>\n<\/tr>\n<\/tbody>\n<tbody>\n<tr aria-hidden=\"true\">\n<td colspan=\"8\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>The GL should be reconciled to the VISA statement at the end of the month. In this case, you can see how the GL balance on January 31 of $1,054.89 matches the statement balance, so the reconciliation would be easy.<\/p>\n<p>Credit cards, like petty cash, can be abused. Unlike petty cash, which is usually a fairly small amount of money, credit card charges can add up quickly and get out of control if not carefully monitored. In the next section, we\u2019ll talk about internal controls on credit cards.<\/p>\n<section class=\"textbox tryIt\" aria-label=\"Try It\"><iframe loading=\"lazy\" id=\"ohm25295\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=25295&theme=lumen&iframe_resize_id=ohm25295&source=tnh\" width=\"100%\" height=\"150\"><\/iframe><iframe loading=\"lazy\" id=\"ohm204221\" class=\"resizable\" src=\"https:\/\/ohm.lumenlearning.com\/multiembedq.php?id=204221&theme=lumen&iframe_resize_id=ohm204221&source=tnh\" width=\"100%\" height=\"150\"><\/iframe><\/section>\n","protected":false},"author":6,"menu_order":16,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Record Sales by Credit Card\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Accounting Principles: A Business Perspective\",\"author\":\"James Don Edwards, University of Georgia & Roger H. 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