Where to post $ received for items used as props

[katchal07]

Hi all,

I have a client who recently was part of an exhibition. The client purchased accessories, etc for the exhibition. At the conclusion of the the exhibition, many of the items were sold. I am included to believe that the $ received would go against the items purchased verses listing as income. Can anyone confirm this?

Thank you in advance for your input.

[Tomekia Lloyd]

Hi,
The answer to this would depend on whether your client does this regularly for revenue. If this was just a side project and it happened to result in income, then the revenues will be categorized as "Other Income".

This category is for income a company makes that is not associated with normal operations. If this is the case, then the accessories for the project would be similarly categorized as "Other Expenses".

If the exhibitions are frequent or the selling of accessories is what he or she does as a business, but just in a different arena, then this would be normal sales revenue. (You may want to create a special revenue subcategory for detailed tracking of these types of events)

Any profits from the sale of the accessories purchased will be reflected in the Income Statement (Profit Loss) for the month.

Hope this helps. Please let me know if I can be of any more help.

[katchal07]

Hi Tomekia,

That does help I think

We currently have the items purchased for this event classified as an expense. This isn't something the client normally does. The sale was for items purchased/created specifically for viewing at the venue.

I believe the client will want to post the monies received from the sale of the items against the items purchased. This is out of my scope of knowledge and I truly appreciate your input.

Thanks again.

[bbSquire]

How you record the sale will also depend on how the display items were tracked in the first place. Were they posted to an asset account (exhibition display) or straight to an expense account?

If it was an asset account then just credit that account and debit cash to deposit (or bank).

If it was an expense account then you can create a contra-expense account called "Re-gain on sale of display equipment" (or something similar). When you record the transaction you will credit this account and debit cash to deposit (or bank).

In either case make sure to add a comment detailing what happened.

See if that works.

Oh, just thought, were the books closed before the sale of the display equipment? Are you crossing fiscal years? If so then these ideas won't work. I'd have to think about what would happen them some more.

Kim. (please feel free to ignore me and/or my advice)