Recording minor non-commercial transactions


I would like to know how would I record paypal account verification transaction please? The sum that was credited into the business account by paypal is 0.01p. How can account for this transaction?



I found my own answer. Here it is in case anyone is intrested:

I think that Paypal deducts this from your next settlement amount - so it is more of a Prepayment. While no one will object to your approach or to treating it as an expense, you could code it to Prepayments. When your next settlement comes in you could gross up the revenue and code the negative amount against prepayments to eliminate. Alternatively just code it to sales revenue, and then when the next transaction comes in short a few pennies and you code that to sales revenue it will now be even.

The way I handled this…

I have an expense “PayPal fees” - instead of increasing this expense like usual, I decreased it by the amount that I was credited (a few cents).

Whether that is the best approach from an accounting point of view, I cannot comment on that.

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