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Leger


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Client has paid a deposit on new business premises.  What's the accounting treatment please?



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John 

 

 

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Artois


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Leger wrote:

Client has paid a deposit on new business premises.  What's the accounting treatment please?

 Hi John

Is it refundable? If so I would treat as an asset on the balance sheet until it is repaid



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Doug

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Cheshire


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Agree with Doug - sundry debtors.

(I assume its being held on a client account at t'other end! Just as an aside)

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 Joanne 

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Leger


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Thanks Doug and Joanne

I've just come back from picking my sister up and the question was open on my comp.  I thought to myself that's got to be a balance sheet item yet couldn't think for the life of me the answer when I asked.



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John 

 

 

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Cheshire


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Leger wrote:

 I thought to myself that's got to be a balance sheet item yet couldn't think for the life of me the answer when I asked.  

 confusewinkbiggrin  Its post January mind blindness!



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Leger


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Do'h. It's a cash accounting one! It's not expenditure though is it as they will get the deposit back if/when they leave



-- Edited by Leger on Monday 3rd of February 2020 05:20:50 PM

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John 

 

 

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RuskinF


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Use it as an asset. Once the contract ends you can change it.

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Cheshire


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RuskinF wrote:

 Once the contract ends you can change it.

 Completely and utterly wrong advice.   IGNORE.



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Leger


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In what way is it an asset?



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Cheshire


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Leger wrote:

In what way is it an asset?

 Its money owed to your customer, so its a sundry debtor (asset).

 

Its the other half of the advice thats pants.

 

Plus 'use' it isnt exactly Accountant speak is it?!



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Leger


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Ah sorry, I was thinking he meant a fixed asset.  Yes sundry debtor I agree with.  I wonder if he means once the contract ends, it removes the sundry debtor when you enter the refund?



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Cheshire


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Leger wrote:

  I wonder if he means once the contract ends, it removes the sundry debtor when you enter the refund?

 When the contract ends and when you receive the refund could be in completely different accounting periods.  You might never get the refund.



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
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