Simple double entry Q!!

Simple double entry Q!!

Didn't find your answer?

Client paid a £3k deposit for a VAN in June 2013. Year end was 30th June.

Van not due to arrive until September.

Double entry would be Cr Bank £3k, Dr ???? - potentially a debtor balance on BS?

Sorry, probably totally simple answer but I can't for the life of me decide where to put it...

Replies (4)

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By petersaxton
16th Jul 2013 12:59

Dr Deposit for a van (B/S)

That is good enough.

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By Richard Willis
16th Jul 2013 13:01

Debit

prepayments in the BS.

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By rohit
16th Jul 2013 16:05

Prepay

Yes prepayments would be my choice as well although doesn't matter that much as both debtors and prepayments go on the same side of the balance sheet :-)

 

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Euan's picture
By Euan MacLennan
16th Jul 2013 16:32

Deposit

I am with Peter - give it its own line, Deposits, under Debtors due within 1 year.

The generic description is "Prepayments & Accrued Income" which to me implies that just as the other half of accrued income would appear in the P&L as Sales, the other half of Prepayments should be an expense in the P&L.  The deposit on a van will be a debit to Fixed Assets in the Balance Sheet, so I would not describe it as a prepayment.

Whatever you do, don't capitalise the deposit as Fixed Assets and don't even consider depreciating it.

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