Discussion:Credit balance of account receivable
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| Revision as of 03:49, 13 October 2009 Szptax (Talk | contribs) (Is there an obli) ← Previous diff |
Revision as of 05:52, 13 October 2009 Captcook (Talk | contribs) (For future refer) Next diff → |
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| {{ForumReplyPost|UserID=Szptax|Date=13 October 2009|Text=Is there an obligation of the client to return the customer deposit (the cause of the credit AR)? If the client must return the funds if the transaction is not completed then I would say the client has a prepayment - for example, if I place a deposit on something and say.... have 30 days to change my mind & receive the item after the 30 day period. If the year end falls in the 30 days, its a liability.}} | {{ForumReplyPost|UserID=Szptax|Date=13 October 2009|Text=Is there an obligation of the client to return the customer deposit (the cause of the credit AR)? If the client must return the funds if the transaction is not completed then I would say the client has a prepayment - for example, if I place a deposit on something and say.... have 30 days to change my mind & receive the item after the 30 day period. If the year end falls in the 30 days, its a liability.}} | ||
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| + | {{ForumReplyPost|UserID=Captcook|Date=13 October 2009|Text=For future reference, I would make sure to reclass a negative asset to a liability account such as deferred revenue/customer deposit, etc. May save you some grief in an audit, but I'm probably just pouring salt in your wound. }} | ||
Revision as of 05:52, 13 October 2009
Discussion Forum Index --> Advanced Tax Questions --> Credit balance of account receivable
Discussion Forum Index --> Tax Questions --> Credit balance of account receivable
| 9 October 2009 | |
| IRS audit manager made adjustment based on credit balance of accounts receivable. He said that cash in clients pocket should be recognized on that year. He also indicated that the prepaid deposit form customer should be treated the same. I do not agree. | |
| October 10, 2009 | |
| Is your client cash basis or accrual?
If cash basis, I agree with the auditor. Think about the offset to get accounts receivable to zero - debit accounts receivable and credit sales (income).....I've seen many QB files where this is a problem. | |
| 13 October 2009 | |
| My client is accrual basis. How can IRS treated prepaid or customer deposit as revenue on accrual basis accounting? Also, for those account with returned merchanside, IRS also wanted to recognize as income. | |
| 13 October 2009 | |
| Is there an obligation of the client to return the customer deposit (the cause of the credit AR)? If the client must return the funds if the transaction is not completed then I would say the client has a prepayment - for example, if I place a deposit on something and say.... have 30 days to change my mind & receive the item after the 30 day period. If the year end falls in the 30 days, its a liability. | |
| 13 October 2009 | |
| For future reference, I would make sure to reclass a negative asset to a liability account such as deferred revenue/customer deposit, etc. May save you some grief in an audit, but I'm probably just pouring salt in your wound. | |
