Shelly asked:

I have two questions for you. I'm running a pub in Alberta that has Video Lottery Gambling (VLG). We collect the money everyday and once a week the government takes their share out of our bank account. I believe the journal entries should be as follows, but I need confirmation:
Dr. Cash on Hand
Cr. VLT Commission
Cr. VLT Sales

When their share is taken out of the bank account, would the journal entry be posted like this:
Cr. bank
Dr. VLT Sales

Or should the VLT sales be set up as a payable?

We also have an ATM machine which we put our own money into, the next day, the money is deposited to our bank account along with a commission. Would the journal entries be as follows:
Cr. ATM
Dr. ATM Receivable

When the money is received:
Dr. bank
Cr. ATM receivable

Gary Booth answered:

The most practical way to show this would be to have the journal like this:
Dr. Cash on Hand
Cr. VLT Commission
Cr. Lottery Gaming Payable

When their share is taken out of the bank account, the journal entry would be posted as follows:
Cr. bank
Dr. Lottery gaming Payable

This is probably a better reflection on what is happening plus it doesn't increase/decrease the sales account which in reality is not sales.

Regarding ATM question. This may be a better way of showing the transaction:
Cr. Bank account
Dr. ATM Receivable

When the money is received:
Dr. bank account
Cr. ATM receivable
Cr commission on ATM

About the author

Gary Booth has over 20 years experience in the tax and accounting field. He operates his chartered accounting practice called Gary Booth CA Professional Corp. The six members of Gary’s team provide a wide variety of accounting and tax expertise to meet the needs of Gary’s clients.

Gary Booth CA Professional Corp is committed to providing excellent customer service and to exceed client’s business expectations. The services the firm provides includes:

• All types of personal tax returns from basic to complex
• Corporation tax returns
• Financial statement preparation
• Audits and review engagements
• Bookkeeping, GST and PST returns and payroll
• Certified quickbooks trainer and set up
• Business plans and business consulting

Gary can reached at 416 626 2727 x23 and www.garybooth.com.

 
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