How to account for a partial refund on a personal expense.

AndyKAndyK Member Posts: 18

Hi,

I accidentally paid for a personal expense via our business PayPal account which is linked to the business bank account in Wave. This of course is not a problem because I simply categorised it as Personal Expense or Withdrawal. Unfortunately part of the order had to be returned and I received a refund for that part of the order. That refund initially looks like and is categorised as Sales income which of course it's not.

What would be the best way to account for that refund?

Thanks
Andy

Comments

  • MikegMikeg Member Posts: 772 ✭✭✭

    @AndyK,
    It should be categorized the same as the disbursement. You mentioned above "Personal Expense or Withdrawal".

  • AndyKAndyK Member Posts: 18

    @Mikeg said:
    @AndyK,
    It should be categorized the same as the disbursement. You mentioned above "Personal Expense or Withdrawal".

    Thanks Mike for your reply.

    Just so I'm sure about this as I may be being a bit thick. The refund I received was via PayPal which of course went straight into the business bank account and thus looks like income.

    Are you saying I can categorise it as Personal Expense or Withdrawal? I don't think I have that option. I wonder if I could categorise it as Owner Investment / Drawings which would make it look like I personally paid this small sum into the business but at least it wouldn't look Sales income. Alternatively there are Refund for Expense categories so presumably I could create a Refund for Personal Expense account which would also take it out of Sales income.

    Thanks for any help
    Andy

  • MikegMikeg Member Posts: 772 ✭✭✭

    @AndyK,
    Yes, since the expense was not business (categorized as personal) then any refund coming back from Paypal should be matched to the original disbursement. I would put them both under Owners drawing/Investment.

  • AndyKAndyK Member Posts: 18

    @Mikeg said:
    @AndyK,
    Yes, since the expense was not business (categorized as personal) then any refund coming back from Paypal should be matched to the original disbursement. I would put them both under Owners drawing/Investment.

    Thanks Mike, that makes sense.

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