Bank reward points earned:

We all know that credit and debit cards offer reward points based on their spending etc. there is possibly a new way to treat it. In the month of March 2021, ABC manufacturers received redeemable points worth 5,000₹.

By Bank (Reward points account) a/c 5,000₹

To SPLOCI-OCI a/c 5,000₹

(Being reward amount recognised in bank account and Reserves & Surplus account through OCI)

By Purchases 12,000₹

By SPLOCI-OCI 5,000₹

To discount a/c 5,000₹

To Reward points 5,000₹

To Payables a/c 7,000₹

(Beings goods purchased on credit and debited the reserve though OCI)

By Payables a/c 7,000₹

To Bank a/c 7,000₹

(Being payment settled)

Note: This transaction in the above order satisfies the balance sheet equation test. 

Now, If the Reward points are expired without using them, then:

By SPLOCI-OCI 5,000₹

To Bank (Reward points) a/c 5,000₹

The only flaw is, it does not reflect the true form of transaction because when the discount is applied, the Assets side value 5,000₹ will reduce immediately as this kind of transaction usually happens and online. But, the transaction tallies only when Reserves are debited first. So I made these compound entries to make it work.

Please buzz me if you have any better entries.