Prepaid Income on Cash Basis

Discussion in 'Technical Queries' started by nickolsen, Jun 8, 2010.

  1. nickolsen

    nickolsen

    Joined:
    Jun 8, 2010
    Messages:
    2
    Likes Received:
    0
    Hello,

    My question is in regards to how preapid income is handled on a cash basis accounting system.

    We are a property management company and deal with apartment complexes. If we have a tenant that is renting an apartment at $1000.00 a month and they give us $3000.00 on June 1st to pay for June, July, and August rent. On a cash basis do we record $3000.00 in June and then $0.00 for July and August? Or do we still spread it out posting $1000.00 for each month?

    Someone told me that on a cash basis you cannot report your income as more than what you have charged for the current month plus the delinquent balances from last month. Thus, if we closed our May with tenants owing us $300.00 and then we charged $1000.00 in rent for June, our income for June could not exceed $1300.00 even if there was a preapid account. Is this correct?

    Thanks

    Nick
     
    nickolsen, Jun 8, 2010
    #1
    1. Advertisements

  2. nickolsen

    nickolsen

    Joined:
    Jun 8, 2010
    Messages:
    2
    Likes Received:
    0
    No one has any thoughts on this?
     
    nickolsen, Jun 11, 2010
    #2
    1. Advertisements

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments (here). After that, you can post your question and our members will help you out.
Similar Threads
  1. Steve
    Replies:
    2
    Views:
    874
    Steve
    Jul 1, 2003
  2. Christina Price

    "Other Cash Income" on Cash Basis P&L

    Christina Price, Apr 9, 2009, in forum: Microsoft Accounting
    Replies:
    0
    Views:
    636
    Christina Price
    Apr 9, 2009
  3. W
    Replies:
    4
    Views:
    3,799
    guidocinelli
    Dec 22, 2009
  4. W
    Replies:
    7
    Views:
    6,613
  5. Hessa Alshehhi

    cash basis and accrual basis

    Hessa Alshehhi, Sep 12, 2014, in forum: Technical Queries
    Replies:
    2
    Views:
    837
    Fidget
    Sep 15, 2014
  6. straightmarble02

    Is cash receipt included in sales in cash basis accounting?

    straightmarble02, Jun 9, 2015, in forum: Exams and Studying
    Replies:
    2
    Views:
    465
    straightmarble02
    Jul 12, 2015
  7. straightmarble02

    converting net income of cash basis to accrual basis

    straightmarble02, Sep 10, 2015, in forum: Exams and Studying
    Replies:
    0
    Views:
    664
    straightmarble02
    Sep 10, 2015
Loading...