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Post Info TOPIC: Deposits


Newbie

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Deposits


Hello

Customer pays deposits for service to be provided after year end. Deposits allocated to liability account. Will re-allocate to sales as service is delivered. One customer cancelled service. Deposit is non refundable. Is this allocated to sales in this year?



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Guru

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Danillon wrote:

Hello

Customer pays deposits for service to be provided after year end. Deposits allocated to liability account. Will re-allocate to sales as service is delivered. One customer cancelled service. Deposit is non refundable. Is this allocated to sales in this year?


I would say accounted for at the date the service is either cancelled or carried out



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice



Expert

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I agree with Doug. It stops being a deposit once the service is cancelled or carried out. Then it becomes an income to be accounted for in my mind.

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Steve


Master Book-keeper

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And I agree with both of you, so there!!



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John

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



Guru

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But what about the VAT tax point, i know the OP did not mention it but this i would say should be accounted for when the deposit is received



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice



Master Book-keeper

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Hi Doug

That crossed my mind when I was replying yesterday.

You're right, the VAT has to be accounted for at the time the deposit is made, except for hire deposits.



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John

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

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