Deposit Received Can Put under Which Account?

[Nurul]

where should i put once i received a deposit for hostel accommodation?

 

[Steve-LevelUp]

Hello Nurul. Are you operating the hostel? Are deposits a regular part of your activity.

If so, you should record this entry as Dr. Cash, Cr. Deposits for stay (Liability).

Then, you should have a master list of deposits received from all clients that matches to the balance in your deposit account. This should also hold when the deposit should be applied.

Then, after the date of stay passes, you can apply this deposit to revenue (Dr. Deposits, Cr. Revenue). Depending on how your revenue recognition systems works, this should essentially cover what you need.

If this is not sufficient, then please let me know.

Regards.
Steve.

 

[Nurul]

Hello Nurul. Are you operating the hostel? Are deposits a regular part of your activity.

If so, you should record this entry as Dr. Cash, Cr. Deposits for stay (Liability).

Then, you should have a master list of deposits received from all clients that matches to the balance in your deposit account. This should also hold when the deposit should be applied.

Then, after the date of stay passes, you can apply this deposit to revenue (Dr. Deposits, Cr. Revenue). Depending on how your revenue recognition systems works, this should essentially cover what you need.

If this is not sufficient, then please let me know.

Regards.
Steve.

Thanks for the info Steve,

We are operating education sector and providing accommodation to student. But the student need to pay deposit for their accommodation.

Another question, what if the student wants to get their deposit refund. How is the transaction?

 

[Steve-LevelUp]

If the student requests a refund, and your policy allows for a 100% refund, then you just reverse the initial entry.
Dr. Deposits for Stay
Cr. Cash

If you have a cancellation fee, then you can

Dr. Deposits for Stay
Cr. Cash (less non refundable portion)
Cr. Cancellation Revenue

 

[Nurul]

If the student requests a refund, and your policy allows for a 100% refund, then you just reverse the initial entry.
Dr. Deposits for Stay
Cr. Cash

If you have a cancellation fee, then you can

Dr. Deposits for Stay
Cr. Cash (less non refundable portion)
Cr. Cancellation Revenue

You are so helpful. Thank you for the info.