Double-entry posting examples
Illustrative only. These entries describe a potential subledger convention, not a settled accounting or legal treatment. Validate account classification, custody, revenue recognition and settlement risk with advisers and partner statements.
Example: $120 bill, $3.05 merchant fee invoiced separately
Assume $120 has become eligible in the regulated partner collection arrangement, and the entire $120 is owed to the merchant. Debit is positive and credit negative in the sample ledger convention.
| Event | Account | Debit (AUD) | Credit (AUD) |
|---|---|---|---|
| Eligible settlement | Partner collection funds / clearing | 120.00 | — |
| Eligible settlement | Merchant payable | — | 120.00 |
| Payout instructed and reserved | Merchant payable | 120.00 | — |
| Payout instructed and reserved | Payout in transit | — | 120.00 |
| Confirmed payout | Payout in transit | 120.00 | — |
| Confirmed payout | Partner collection funds / clearing | — | 120.00 |
The two rows for each event form a separate balanced journal. The actual chart of accounts may need intermediary settlement and reserve accounts, depending on partner contracts.
Merchant fee is independent
For a separately billed $3.05 successful-collection fee, an illustrative accrual is debit merchant fee receivable $3.05; credit fee revenue $3.05. Applicable GST, payment-processing expenses, collectability and revenue-recognition timing must be assessed separately. Do not deduct $3.05 from the merchant's $120 payout under the preferred commercial model.
Reversals and disputes
A chargeback after payout can create a funding deficit or merchant receivable; do not assume available safeguarded funds can cover it. Require documented liability, reserve and recovery policy. Use reversing journals, not mutations to original postings.
Engineering tests
- Every journal balances to zero in its own currency.
- Same event key posted twice results in one journal.
- A payout cannot reserve the same collection twice.
- A failed payout releases or reclassifies its reservation exactly once.
- Late reversal creates compensating entries without changing history.
- Reconciliation differences generate exception cases rather than silent balance adjustments.