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Account for Card Auth and Refunds

Which account should I reconcile merchant card auths and refunds

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Hi,

I'm a small business owner doing some DIY book keeping and had a question regarding the account on which I should register card authorization payments and refunds. I tend to use a bunch of US-based online services that insist on making small debits from my current account and then refunding them.

My initial choice was just to make them an expense and refund them, but thinking it through it should probably be am asset account. Correct?

Do people tend to use a catch-all account for these? Maybe in the 6xx range if using Xero or similar?

Thanks!

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By Duggimon
12th Apr 2021 11:05

I'd use a suspense/contra account, which would probably be a balance sheet account but it shouldn't really matter.

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By Dots
12th Apr 2021 12:36

OK, good to know!

I've gone with crediting the Suspense account for a 'card auth charge' and debiting the same account for a 'card auth refund' once returned.

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