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Post Info TOPIC: help please


Newbie

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help please
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we hire out tents and pitches etc over the summer period, in order to keep stock of items out, once the order has been confirmed it is invoiced immediately with a request that 25% be paid to secure remainder to be paid 1 month before hire date..  this ensures we dont over hire our equipment and double book - and also payment is made in full before hire date

my question is - at year end, or even month end can i post a journal adjust sales to deferred income or WIP - i have a spreadsheet that shows how much is for each month..whats the best way to account for this

thanks



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Senior Member

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Basically, assuming that you are not VAT registered and the hire is for £100, the transactions would be posted as follows:-

1. Original Sales Invoice

Dr Trade Debtor - Customer A 100
Cr Sales 100

2. Deposit

Dr Bank 25
Cr Trade Debtor - Customer A 25

3. Hire Not Performed at Year End (Year End Date) and reversed on first day of new accounting period

Dr Sales 100
Cr Deferred Income (Creditors) 100

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