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50/50 Fundraiser Ticket sales Revenue/Expense Question
Weekly we sold tickets for a 50/50 “pot” for several months and now have a winner. My question is should the weekly revenue be split half to a liability account and half to a revenue account then the winner would be paid the balance in the liability account or would all of the revenue be booked and recognized as revenue when received and then the winner paid out as an expense? Thank you!
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1 Reply
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I would go with the liability option. You know from the getgo that 50% of every ticket sale is owed to the winner so there would be no justification to call it revenue. And I don’t think it is necessary from the financial statement reader’s point of view to see the payout as an expense.