What is the proper way to record "bonus" money on a card. specifically, when I charge my transit pass for 100, I actually get 150 on the transit pass account. how do I record the extra 50?

  • What approaches have you tried? How do you normally record such purchases?
    – Lawrence
    Sep 1, 2019 at 11:24
  • Right now I just opened a new account and deduct from it but it screws with up with the balance. no idea how to do it better short of what base64 suggested
    – Yaniv K.
    Sep 1, 2019 at 13:27
  • What about the 3-account approach I detailed in my answer?
    – Lawrence
    Sep 1, 2019 at 13:28
  • I tried that, and it generally works it just that the third account shows up in the total net balance and it messed with it so I am looking for something cleaner. its a minor annoyance but still
    – Yaniv K.
    Sep 1, 2019 at 13:37
  • What about making the third account an Expense account? That would clean up the balance sheet side of things, and your total Expenses on this transaction would be $100 to match your cash outlay.
    – Lawrence
    Sep 1, 2019 at 13:42

4 Answers 4


You are paying for your transit it two steps: first, you transfer money from some source account to your card; second, you transfer money from your card to the transit authority. To account for the "bonus", treat it as a transfer from the transit authority to your card.

                      Asset:Bank account     Asset:Transit card      Expenses:Transit
Add money to card          -100                       150                  -50
Went to work                                           -4                    4
Came home from work                                    -4                    4

By the time you deplete your card, everything balances out: $100 comes out of your bank account; $150 goes on to, then comes off, your transit card; and your total transit expenses are $100.

If you are looking to be more precise, record the extra $50 for what it is: additional government income:

                      Asset:        Asset:       Expenses:     Income:
                    Bank account  Transit card     Transit    Govt travel enticement
Add money to card      -100          150                         -50
Went to work                          -4             4
Came home from work                   -4             4

You do not record the $50 at all.

The Transit Company is offering you a Trade Discount, which is a tactic to induce you to "Buy More". The original price of $150 is arbitrary. Think of it, if a product in the supermarket says Original: $5, now buy 2 get 1 free, do we really enter the free product $5 into accounting system? No.

The only time when you have to enter Discount is Cash Discount. It arises when you buy something on credit, and subsequently the seller gives you a discount only if you pay early. e.g the seller may say if paid within 30 days, 10% would be discounted on the statement.

For more information, you can look up IFRS 15.

For every $1 nominal value you spend on the Transit Pass during the day, you shall Debit Transport Expense and Credit Transit Pass by $0.66.

  • I am aware its not actually a discount hence I wrote "bonus" in quotation. its a government subsidiary to promote public transport. I use it primarly for personal account and not any business need and I'd prefer some method which will let me see my balance in my transit pass at a glance rather than starting to play with the values. it might be wrong in terms of accounting standards but I just need it to keep track of my expenses better. Plus since the subsidary rate is expected to charge around March/April it will just make thing more unclear
    – Yaniv K.
    Sep 1, 2019 at 13:22
  • Hi, the principle of accounting is avoid overreporting income, and to avoid underreporting expense. Under this principle, if the subsidy is directly related to the Number of Transit Passes you buy, there is no need to increase both the Income and Expense. However, if the subsidy is based on your income level etc, you can consider it as a reversal of Tax Payment. So based on your intention of relfecting the nominal value of $150, I would suggest Debit Transit Pass and Credit Tax Expense by $50, which is similar to what Lawrence suggested except Gifts Received is replaced with Tax Expense.
    – base64
    Sep 1, 2019 at 13:27
  • 1
    I'm aware of the princples,but its for personal review not actual business accounting so no need to be rigid on the rules of accounting. I need something which will show me the data at a glance how much I spent on public transport, how much I have left in the transit pass. the subsidiary is just a simple government subsidiary not related to income level or anything like that.
    – Yaniv K.
    Sep 1, 2019 at 13:42

The simplest way is to treat the purchase the same way you treat buying groceries:

  • Bank account (Asset)
  • Grocery account (Expenses) - in this case, let's call it "Public Transportation"

Then enter the $100 in the bank account as a withdrawal, make a note in the Description field that you were credited $150, and select "Expenses:Public Transportation" as the Transfer account.

If you want to record $150 in the Public Transportation account, you'll need a third account to catch the extra $50. In your Bank account, enter a new transaction and select "Split" by either clicking the button or using the menu item "Actions | Split Transaction". Then enter these 3 splits in the same transaction:

  • Transfer: "Assets:Current Assets:Bank Account", Amount $100 in the Withdrawal column
  • Transfer: "Expenses:Public Transportation", Amount $150 in the Deposit column
  • Transfer: third account (e.g. "Income:Gifts Received"), Amount $50 in the Withdrawal column.

Note: I'm not an accountant and this isn't financial advice. I'm not sure where the third account should really sit. You'll need to be careful how you treat it when tax-preparation time comes around.


I was given a solution so I am sharing here. By using one of the fake currency (there is a currency called "No Currency") I setup an exchange rate based on the "bonus" and it doesn't interfere with the real currency balance.

  • This works, though if they change the bonus to $20, does it increase or decrease the value of the balance on your card? I think you'd be better off using @chepner's solution. Sep 1, 2019 at 21:06
  • @RupertMorrish in that case, the OP would treat it as a change in the exchange rate of the fake currency. This is a good approach. The only situation this doesn’t work is the unlikely scenario where the card issuer gives a free bonus (eg Christmas present). In that case, using a third account would work better.
    – Lawrence
    Sep 2, 2019 at 1:01

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