If your unit is planning a revenue-generating event (such as a conference) and one of your paying customers cancels their registration and asks for a refund, do you know how to properly account for the refund issued to the customer?
Since credits issued to your customers are essentially refunds of previously recorded revenue, you should simply debit the refunds to the same revenue account code that was used on the initial deposit. For example, if you deposited the receipt from your customer to the appropriate revenue account code (e.g., 305300, Seminar and Conference Revenue), then the refunds should be debited to that same revenue account code. That way, the initial deposit and the subsequent refund net to $0 within the same revenue account code.
Another option would be to debit the refunds to the 308500, Other Refunds account code. This could be useful for units who would like to track refunds separately from the initial payments, so they can quickly see the total amount of refunds that were issued for a particular revenue-generating event when scanning the operating ledger.
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For further questions, refer to the Self-Supporting Funds section of UAFR’s Who to Ask list.
