Teri

Reading your responses I can understand why you would think it is accrual. We are actually doing cash basis for both accounting and taxes. Unfortunately it seems that the "customer deposits" should not be going to a liability account at all and it is just set up wrong in Quickbooks. It was set up this way before I started working here and now that I am aware it isn't right I will be trying to figure out how to fix it so everything records properly and hopefully I won't have to worry about moving it around at the end of the year! Thank you for your replies it has helped me have a better understanding of the way it should work.