@AGMAIN wrote:
We are an S-Corp running on a cash basis. We get half down from our customers to get a job started and that money goes into a Customer Deposit that is a "other current liability". When the total due on the bill is paid in full that money is then moved out of customer deposits and into income. The accountant is telling me the money in customer deposits is considered income for the year so I need to move it to income on Dec 31st.
It depends
IF, if the deposit is refundable, then the accountant is wrong, cash or accrual basis, it is a liability until the job/sale is invoiced.
IF, if the deposit is not refundable, then yes it is income when received and should have posted as such on the date received, cash or accrual basis.
IF, if the deposit is refundable until the job starts and then become non refundable, then it is income on the day the job starts.
Please, if you are responding to me, use my name at the top of the post, in this community there is no other way to know who you are responding to.
Only you know which IF applies
