E-commerce

Gift Card Redemption — Product Purchase

Customer uses a gift card to buy products from the online store.

Account NameTypeDebit ($)Credit ($)
Gift Card LiabilityLiability (-)100.00-
Sales RevenueRevenue (+)-100.00
Cost of Goods SoldExpense (+)40.00-
Merchandise InventoryAsset (-)-40.00

💡 Accountant's Note

Redemption converts the liability to earned revenue and simultaneously recognizes COGS. Both must be recorded at the same time.

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Expert Analysis by Qusai Ahmad

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