How to record discounts, comps and refunds in a studio sales journal entry

Updated 2026-10-19

How to do it by hand

1. Choose net or gross. Net is simplest and what most small studios use. Gross lets you see how much you discounted, at the cost of one more account.
2. Net method. Use revenue category totals after discounts. The tender totals already reflect what was actually paid, so the entry balances without a discount line.
3. Gross method. Credit revenue at list price, and debit a Discounts account for the total discounts. The debit makes up the gap between list price and what was paid.
4. Handle refunds. Refunds come through as negative amounts. Either let them reduce the revenue of their category, or debit a Refunds account so the amount stays visible.
5. Treat comps consistently. A 100% comp is a discount of the full price. In net mode it never appears; in gross mode it is a debit to Discounts.
6. Check the balance. Debits equal credits. If you changed method midyear, note the month you switched.

Why this happens

Discounts and refunds change revenue, not the cash received, so they are where hand-built entries most often go out of balance: one side is gross and the other net.

When the manual way is not enough

Your accountant may have a preference between net and gross. Ask before the first month, because switching later makes comparisons harder. We provide bookkeeping software, not accounting advice.