Who exactly pays for the meal when its “on the house”?
In: Other
If it’s a big reataurant or chain they have a budget for that, including refunds and such from mistakes. But smaller restaurants just take the cost, or the owner pays for your meal. They just mark it down as am expense or make a note of the cost.
Think of it this way. They have costs (what they spend money on to run their business), and they have income (the money they make from selling the food and service). Each os made up of a bunch of little events that are marked and noted in some record, then added up at some period (like the end of the month).
If it’s “on the house” the food used is marked as a cost, but it’s noted that there was no income, or that the income for that particular transaction was $0. And then that just gets added on to the monthly total.
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