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Re: How to handle periodic cash reciepts vs. non-periodic accounts payable?
- Subject: Re: How to handle periodic cash reciepts vs. non-periodic accounts payable?
- From: Richard Ellis <..hidden..>
- Date: Tue, 26 Sep 2006 13:28:36 -0400
On Tue, Sep 26, 2006 at 11:21:45AM -0500, John Hasler wrote:
> Tony Fraser writes:
> > As has been said if this is a big part of your business you may
> > _want_ to break the transaction into to so you can book the
> > pre-payment to a liability account.
> To be pedantic, all rent payments should be booked as liabilities
> as rent is normally paid in advance.
Forgive me for asking some questions that the answers to may seem
obvious to an accountant, but as I am not an accountant, well:
Why would rent payments be booked as liabilities because they are
paid in advance?
If they are booked as liabilities, how would they then be handled to
become "income" to show as earnings in the business?
Thanks in advance for the answers,