Thank you to everyone that has responded to my post. You are all super knowledgeable and I appreciate all of it. I am going to have to try to read this very carefully to make sense of it all. You are correct that I don't speak accountant lingo very well! Yes the account listed on my chart of accounts that I was referring to is indeed called "customer deposits" and yes it could also be called "deferred income". Regarding the question of is the deposit refundable that depends. Sometimes it is, sometimes it isn't. It depends on the job (contracting). As far as I know we are reporting taxes on a cash basis but after reading all of these comments I think I need to take this to my accountant and get a better understanding.
