Discover in your books

Discover runs its own network and issues its own cards, and since 2025 it has been part of Capital One. In the books, a Discover card is a liability, the same as any company card, and each charge is an expense on the day it's made. What sets it apart is how much comes back through the same feed: refunds and cash back rewards.

A refund undoes part of an earlier charge. In the example, the $180 credit for the downgraded plan debits the card payable and credits Software subscriptions, the same account the original charge hit. If the original charge was in a month you've already closed, book the refund in the month it arrives and leave the earlier month as reported. If the charge had gone to prepaid expenses, the refund reduces the prepaid instead.

Cash back is a reward for spending. However it's redeemed, it's never revenue. Most companies book it against the expense it was earned on or to other income, and the choice belongs in a written policy so it's the same every month.

Tie the card payable to the statement balance. Then read the credits on the statement one by one. Each should match a refund or a reward in the books, and a credit that matches nothing is worth a look before you close.

Prepaid expenses explains the annual plan case. Visa and Mastercard cards book the same way, though their issuers handle rewards differently.