Below are examples of journal entries for a variety of events . If you can't find what you're looking for, let us know at support@amilia.com and we'll add it to the article!

πŸ”Ή Invoice Journal Entries

- Service on the same-day (single occurrence)

- Service on a future date (single occurrence)

- Service with multiple future occurrences

- Discount on same-day service (single occurrence)

- Discount on service with multiple occurrences

- Facility booking on the same day (single occurrence)

- Facility booking on a future date (multiple occurrences)

- Membership with fixed dates

- Membership with fixed duration

- Multipass with unlimited passes

- Multipass with limited passes

- Recurring subscription billing

- Custom invoice items (extra fees and/or rebates)

πŸ”Έ Payment Journal Entries

- Client payment or account deposit

- Scholarship payment

♻️ Credit Memo Journal Entries

- Invoice cancellation of a service (single occurrence)

- Invoice cancellation of a service (multiple occurrences)

πŸ’Έ Refund Journal Entries

- Payment refund

πŸ“— Reconciliation Journal Entries

- Reconciliation deleted - for a payment

Examples of Invoice Journal Entries

Here are some characteristics of journal entries in the Invoice category:

  • Generated by events that include invoice creation, a future activity/booking occurrence, Multipass/membership/subscription expiration, etc. In short, any event related to invoices in Client billing.

  • The effective date shows when the event (e.g., invoice creation, occurrence) took place. The reference number is the invoice's transaction number in Client Billing.

  • An asset account is debited, and a liability and/or revenue account is credited.

  • If a service occurs in the future, the revenue is deferred to a liability account until the service is delivered (i.e., occurs). If a service has multiple occurrences, a proportional amount is recognized as revenue after each occurrence takes place.

πŸ”Ή Service on the same day (single occurrence)

When invoicing a service that occurs once, on the same day of purchase (e.g., a one-time activity, a drop-in, merchandise, etc.); the revenue is immediately recognized and credited to the ledger account assigned to the item.

A client buys a drop-in that occurs the same day.

1 ) $20 is owed to you which creates a debit to accounts receivable.

2) $0.87 is owed to the government, so it's credited to a tax liability account.

3) $1.74 is owed to the government, so it's credited to a tax liability account.

4) $17.39 is recognized (as the activity occurs that day) and credited to the revenue account assigned to the activity.

πŸ”Ή Service on a future date (single occurrence)

When invoicing a service that occurs once, at a later date (e.g., a future one-time activity, a future drop-in); the revenue is deferred until the class occurs, in which case it's then recognized and credited to the ledger account assigned to the item.

A client buys a drop-in that occurs at a later date.

1 ) $20 is owed to you which creates a debit in accounts receivable.

2) $0.87 is owed to the government, so it's credited to a tax liability account.

3) $1.74 is owed to the government, so it's credited to a tax liability account.

4) $17.39 is deferred revenue (as the activity has not yet occurred).

πŸ“† What happens when the activity occurs?

When the drop-in occurs (event), new journal entries show the deferred value recognized as revenue, and credited to the ledger account assigned to the activity.

The event generates 2 journal entries, referencing the original invoice

1 ) $17.39 is debited from the account where the revenue was initially deferred to.

2) $17.39 is recognized (as the activity has occurred) and credited to the revenue account assigned to the activity.

πŸ”Ή Service with multiple future occurrences

When invoicing a service with multiple occurrences (e.g., session activity); its value (before tax) is divided by the total number of occurrences. As each one occurs, a proportional amount is recognized as revenue and credited to the ledger account assigned to the item.

A client buys merchandise, and a session activity (with 44 occurrences).

1 ) $511.50 is owed to you which creates a debit in accounts receivable.

2) $22.24 is tax to the government, so it's credited to a tax liability account.

3) $44.38 is tax to the government, so it's credited to a tax liability account.

4) $187.79 is revenue for the classes that already occurred, at the time of purchase.

5) $247.09 is deferred revenue (the value of classes that haven't yet occurred).

6) $10.00 is recognized and credited to the revenue account assigned to the merch.

πŸ“† What happens after each occurrence?

With each class occurrence (event), journal entries show a portion of the initially deferred value recognized as revenue and credited to the ledger account assigned to the activity.

Below, 1 of the 44 classes in the session has occurred.

The event generates 2 journal entries, referencing the original invoice.

1 ) $9.97 is debited from the account where the revenue was initially deferred to.

2) $9.97 is recognized (as the activity has occurred) and credited to the revenue account assigned to the activity.

πŸ”Ή Discount on a same-day service (single occurrence)

When invoicing a discounted service delivered on the same day of purchase (same-day activity, drop-in, private lesson, merchandise); the discount reduces both the amount owed by the client and the tax owed to the government. The revenue is recognized and credited to the ledger account assigned to the item.

A client buys a same-day drop-in with a discount applied.

1 ) $17.25 is owed to you which creates a debit in accounts receivable. The initial amount owing was $23, but was reduced by the discount of $-5.00 + $-0.75tx.

2) $5 represents a reduction of income, which is debited to the contra revenue Discounts account.

3) $0.75 is the remaining tax to the government, so it's credited to a tax liability account.

4) $1.50 is the remaining tax to the government, so it's credited to a tax liability account.

5) $20 is recognized (as this drop-in occurs today) and credited to the revenue account assigned to the activity.

πŸ”Ή Discount on a service with multiple future occurrences

When invoicing a discounted service with multiple future occurrences (session activity); the discount reduces both the amount owed by the client and the tax owed to the government. Both the discount and the service's value are divided by the total number of occurrences. With each occurrence, a proportional amount of the service's value is recognized and credited to the revenue account assigned to the item. A proportional amount of the discount is debited from the Default-Discounts revenue account and credited to the Default-Deferred Discounts liability account.

A client buys a session activity with a discount applied (with 96 occurrences).

1 ) $339.17 is owed to you which creates a debit in accounts receivable. The initial amount owing was $344.92, but was reduced by the discount of $-5.00 + $-0.75tx.

2) $0.42 pertains to the discount value for classes that already occurred. This is a reduction of income, so it is debited to the contra revenue Discounts

3) $4.58 is the remaining amount of discount, which is deferred for the time being.

4) $14.75 is the remaining tax to the government, so it's credited to a tax liability account.

5) $29.42 is the remaining tax to the government, so it's credited to a tax liability account.

6) $25 is recognized (for classes that already occurred) and credited to the revenue account assigned to the activity.

7) $275 is deferred revenue (for classes that haven't yet occurred).

πŸ“† What happens after each occurrence?

With each class occurrence (event), journal entries show a proportional amount of the service's deferred value credited to the revenue account assigned to the activity.

Discounts work backwards, as they signify a reduction of income. A proportional amount of the initial discount is debited from the Default-Discounts revenue account and credited to the Default-Deferred Discounts liability account.

Below, 1 of the 96 classes in the session has occurred.

1 ) $3.20 is debited from the account where the activity revenue was initially deferred.

2) $0.08 is the value of discounts pertaining to the occurrence, which is debited from the account where it was initially deferred.

3) $3.20 is recognized and credited to the revenue account assigned to the activity.

4) $0.08 is credited to the deferred discounts account since it's a reduction of income.

πŸ”Ή Facility booking on the same day (single occurrence)

Applies to single occurrence admin bookings, online facility bookings and overnight bookings if the reservation takes place on the date of purchase. An overnight booking taking place over several days is still considered a single occurrence. The revenue is recognized and credited to the ledger account assigned to the facility.

A client books a facility online and reserves a spot for the same day.

1 ) $15 is owed to you which creates a debit in accounts receivable.

2) $0.65 is tax to the government, so it's credited to a tax liability account.

3) $1.30 is tax to the government, so it's credited to a tax liability account.

4) $13.05 is recognized (as the booking occurs that day) and is credited to the revenue account assigned to the facility.

πŸ”Ή Facility booking on a future date (multiple occurrences)

Applies to admin bookings, online facility bookings and overnight bookings if one or more occurrences have yet to take place. With each occurrence, its value is recognized and credited to the revenue ledger account assigned to the facility.

In the Facilities tab, an admin creates a booking with invoice to reserve a facility from 1PM - 3PM on 4 separate days (i.e., 4 occurrences).

1 ) $459.92 is owed to you which creates a debit in accounts receivable.

2) $20 is tax to the government, so it's credited to a tax liability account.

3) $39.92 is tax to the government, so it's credited to a tax liability account.

4) $100.00 is recognized (one of the reservations occur that day) and is credited to the revenue account assigned to the facility.

5)$100 is deferred, until the occurrence takes place.

6)$100 is deferred, until the occurrence takes place.

7)$100 is deferred, until the occurrence takes place.

πŸ“† What happens after each facility occurrence?

With each booking occurrence (event), journal entries show the initially deferred value recognized and credited to the facility's assigned revenue ledger account.

Below, 1 of the 4 gym reservation occurs.

1 ) $100 is debited from the account where the facility revenue was initially deferred.

2) $100 is recognized and credited to the revenue account assigned to the facility.

πŸ”Ή Membership with Fixed Dates

When invoicing a membership with fixed expiration dates, the revenue is deferred and only recognized in the membership's revenue account once it expires.

A client buys a membership that expires on July 30th 2021.

1 ) $57.49 is owed to you which creates a debit in accounts receivable.

2) $2.50 is tax to the government, so it's credited to a tax liability account.

3) $4.99 is tax to the government, so it's credited to a tax liability account.

4) $50 is deferred until the membership expires.

πŸ“† What happens when the membership with fixed dates expires?

On the expiry date (in this case, July 30th 2021), journal entries show the membership revenue debited from the deferred account and credited to the revenue ledger account assigned to the membership.

1 ) $50 is debited from the liability account where the revenue was initially deferred.

2) $50 is recognized and credited to the membership's revenue account.

πŸ”Ή Membership with Fixed Duration

When invoicing a membership with a fixed duration, the revenue is initially deferred. A proportional amount of the membership's value (relative to its duration length in days, weeks or months) is recognized as revenue as time passes, up until the expiry. At this point, the remaining value is debited from the Default-Deferred revenues account and credited to the membership's revenue ledger account.

On July 20th, a client buys a membership that is active for 1 month after purchase.

1 ) $57.49 is owed to you which creates a debit in accounts receivable.

2) $2.50 is tax to the government, so it's credited to a tax liability account.

3) $4.99 is tax to the government, so it's credited to a tax liability account.

4) $50 is deferred for now and will be recognized incrementally as time passes on.

πŸ“† What happens when the membership with fixed duration expires?

Revenue recognition is based on whether the membership is active for a number of days, weeks or months. In our example, this membership is active for one month, which means it expires at 12am on August 20th. A portion of the revenue is recognized on the last day of each month up until expiry, at which point the remaining value is credited to the membership's revenue ledger account.

Below, as July ends, a portion is recognized as revenue. As August ends, the remaining value is recognized as revenue.

1 ) $19.35 represents a proportional amount of the total value, based on the membership's duration length. At the end of July, it's debited from the liability account to which it was initially deferred.

2) $19.35 is credited to the membership's revenue account. Since the membership is set to a 'monthly' duration, this proportional amount of revenue (from July 20th to July 31st) is recognized at month's end.

1 ) $30.65 of the membership's remaining value that was initially deferred is debited from that liability account on the day the membership expires in August.

2) $30.65 is recognized as revenue and credited to the membership's revenue account (as this membership has expired).

πŸ”Ή Multipass with Unlimited Passes

When invoiced, an unlimited multipass with no expiry date will see its revenue recognized and credited to the multipass' assigned revenue ledger account.

When invoiced, an unlimited Multipass with an expiry date will see its revenue deferred to a liability account. When it expires, the revenue is credited to the multipass' assigned revenue ledger account.

πŸ”Ή Multipass with Limited Passes

When invoiced, a limited Multipass with no expiry date will see its revenue deferred to a liability account. Each time a pass is redeemed for an activity that occurs, its value is recognized and credited to the activity's assigned revenue ledger account.

When invoiced, a limited multipass with an expiry date will see its revenue deferred to a liability account. Each time a pass is redeemed for an activity that occurs, its value is recognized in the activity's assigned revenue ledger account. If the Multipass expires before all its passes are redeemed, the remaining value is recognized and credited to the Multipass' assigned revenue ledger account.

A client buys a 5-pass Multipass.

1 ) $34.49 is owed to you which creates a debit in accounts receivable.

2) $1.50 is tax to the government, so it's credited to a tax liability account.

3) $2.99 is tax to the government, so it's credited to a tax liability account.

4) $30 is deferred to the Default-Multipass liability account, until a pass has been redeemed.

πŸ“† What happens when a pass is redeemed?

Each time a pass is used, the value of that pass is recognized and credited to the revenue account assigned to the activity, but journal entries are only generated once the class actually occurs.

A client uses their Multipass to register to a drop-in that occurs on July 22nd.

1 ) $6 represents the value of a single pass used to register to the class. It is debited from the Default-Multipass liability account to which it was initially deferred.

2) $6 is recognized as revenue as the class occurs and is credited to the activity's revenue account.

πŸ“† What happens if the Multipass expires before all passes are redeemed?

If unused passes remain by the time the Multipass expires, their value is recognized and credited to the Multipass's assigned revenue account.

πŸ”Ή Recurring Subscription Billing

Subscriptions are invoiced on a monthly basis, but the service is only considered rendered on the last day of the month that the subscription period is valid. Revenue recognition relies on the subscription's billing day or its expiry date.

Let's assume a subscription has a billing day set to the 25th.

July 25th: The subscription is invoiced for the period between the 1st - 31st of August.

  • The revenue is deferred to the Default-Deferred revenues account, as it is only recognized on the last day of the month that the subscription period is valid.

August 31st: The last day of the month that the subscription is valid.

  • New journal entries (referencing the original invoice #11170575) show the recognized revenue debited from the Default-Deferred revenues and credited to the subscription's assigned revenue account.

Let's assume the same subscription expires on Sept 13th.

August 25th: The subscription is invoiced (as usual) to cover the next valid period.

  • The revenue is deferred to the Default-Deferred revenues account, as it is only recognized on the last day of the month that the subscription period is valid.

Sept 12th: The last valid day before the subscription expires. The revenue is recognized on this day, rather than the habitual last day of the month.

  • New journal entries (referencing the original invoice #11483175) show the recognized revenue debited from the Default-Deferred revenues and credited to the subscription's assigned revenue account.

πŸ”Ή Custom Invoice Items (Extra fees and/or Rebates)

Applies when using a custom invoice item in the form of an extra fee or rebate. Admins can apply custom invoice items at checkout, or within the client's billing.

When invoiced, the revenue is immediately recognized and credited to the revenue ledger account assigned to the custom invoice item (and not to any other ledger revenue account).

An admin makes a purchase on behalf of a client. At checkout, they add an extra fee.

1 ) $16.50 is owed to you which creates a debit in accounts receivable.

2) $0.50 is tax to the government, so it's credited to a tax liability account.

3) $1 is tax to the government, so it's credited to a tax liability account.

4) $5 represents the extra fee, and its revenue is credited to the revenue account assigned to the custom invoice item.

5) $10 represents the revenue from the merchandise item, which is credited to its revenue account.


Examples of Payment Journal Entries

Here are some characteristics of Payment journal entries:

  • Consists of only 2 journal entries.

  • The Default-Account deposit liability account is always credited (it's only when reconciling a payment to an invoice that Reconciliation journal entries will reflect the value being credited to the Default-Accounts receivable account).

  • The effective date shows when the event (i.e., payment) took place.

    The reference number is the payment's transaction number in Client Billing.

  • Installment payments, post-dated checks and/or eChecks don't generate payment journal entries until their planned date.

πŸ”Έ Client Payment or Account Deposit

Applies to client payments (in-store, in client billing or via a user account). If the client has planned installments, post-dated checks and/or eChecks, payment journal entries only appear once the planned payment has occurred.

A client makes a payment of $50.

1 ) $50 is debited to the Default-Cash asset account once you receive the payment.

2) $50 is then credited to the Default-Account deposit liability account. At this point, the payment is considered an advance because it isn't linked to an invoice. It's only in the Reconciliation category of journal entries that we'll see the payment debited from the Default-Account deposit account and credited to the the Default-Accounts receivable account.

πŸ”Έ Scholarship Payment

When invoicing an item eligible for a scholarship, the revenue from the sale itself is recognized in the ledger account assigned to the service. The scholarship is tracked with journal entries in the payment category, with funds being debited from a scholarships contra-revenue account. When wrapping up your fiscal year, you'll deduct the amount of the scholarship ledger account from your gross revenue in order to find your net revenue.

A client purchases merchandise that is eligible for a scholarship.

The client pays $6.50, and $5 is paid for with the scholarship.

  • 2 journal entries are generated for the client's payment; and

  • 2 more separate journal entries are generated for the scholarship payment.

1 ) The scholarship payment of $5 creates a debit in the Scholarships contra-revenue account.

2) $5 is credited to the account deposit account until the scholarship payment is reconciled.

Once the scholarship payment is reconciled.....

1 ) $5 is debited from the account deposit account.

2) $5 is credited to accounts receivable.


Examples of Credit Memo Journal Entries

When an invoice is canceled, credit memo journal entries are created to essentially reverse those that were generated when the offer was initially invoiced. Journal entries generated prior to the invoice being canceled are not affected.

♻️ Invoice cancellation of an offer with a single occurrence

Applies when canceling an offer in which all of the revenue was initially recognized at the time of invoicing (e.g., one-time session activities, drop-ins, private lessons, one-time facility booking, merchandise, etc.).

Below, an overnight booking was cancelled.

♻️ Credit memo 11048942 generates 4 journal entries

1 ) $400 isn't owed to you so it is debited from the revenue account.

2) $20 isn't owed to the government, so it is debited from the tax liability account.

3) $39.90 isn't owed to the government, so it is debited from the tax liability account.

4) $459.90 total value has been credited to the Default-Account deposit account.

♻️ Invoice cancellation of an offer with multiple occurrences

Applies when canceling an invoice with an offer that has multiple occurrences that have occurred or are yet to occur.

Below, an activity (with multiple occurrences) and a service fee is cancelled.

♻️ Credit memo 11049396 generates 6 journal entries

1 ) $247 represents the value of occurrences that haven't taken place. As it is no longer planned, it is debited from the Default-Deferred revenues liability account.

2) $187.88 represents the value of occurrences that have taken place. It isn't owed to you, so it is debited from the revenue account.

3) $5 of fees isn't owed to you, so it is debited from the revenue account.

4) $21.99 isn't owed to the government, so it is debited from the tax liability account.

5) $43.88 isn't owed to the government, so it is debited from the tax liability account.

6) $505.75 is the total value that is credited to the Default-Account deposit account.


Example of Refund Journal Entries

Here are some characteristics of Refund journal entries:

πŸ’Έ Payment refund

When an admin chooses to refund a payment, new journal entries are created to reverse the initial payment's effect on your ledger account balances.

Payment 50975366 initially generated 2 journal entries

1 ) $23 is debited to the Default-Cash asset account once you receive the payment.

2) $23 is credited to the Default-Account deposit liability account, until the payment is reconciled to the invoice.

Refunding a payment creates a refund record in Client Billing, resulting in 2 journal entries to offset the original entries created when the payment was initially made.

Refund 51108239 generates 2 journal entries

1 ) $23 is debited to the Default-Accounts receivable, representing the value that was initially paid to you by the client.

2) $23 is credited from the Default-Cash account, to represent giving the money back to the client.


Example of Reconciliation Journal Entries

Reconciliation journal entries are generated when a payment is reconciled to an invoice, or a change occurs with a payment's reconciliation status.

πŸ“— Reconciliation deleted - for a payment

This category of journal entries appears after a reconciliation status has changed, in the case of a payment refund or a or reconciled to a different invoice. The purpose of this category of journal entries is to reverse the initial payment reconciliation.

Below, a payment is refunded back to the client and no longer reconciled to an invoice.

Originally, payment 51076773 was reconciled with invoice 11124004

Journal entries were generated for the payment and for the reconciliation

Payment 51076773 was refunded, essentially canceling the payment

2 new journal entries are generated to show that Payment 51076773 is no longer reconciled to invoice 11124004.

You might also be interested in:

The Journal Entries Page

How Revenue is Deferred and Recognized

Accrual Accounting

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