Quicken & Other Budget/Accounting Software/Revenue Recognition



This is actually follow up from your previous response on revenue recognition :

Your response was :
The easiest way to record the sale would be to create a monthly invoice
to the affiliated company in the amount of $1,083,333.33.  
On the invoice use an item that points to the appropriate revenue account.
When the payment is received apply the payment to the invoice.

My Question:
What type of revenue account for an example please? Also this is not actual received fund". Just want to recognize it.

ANSWER: If you don't have one, set up a new chart of account
Type = income (or revenue)
Name - Sales

It is OK that the invoice is not paid, the invoice is a transaction type
that will recognize income in the month earned and show that the money
is still open and unpaid as an asset "accounts receivable"

Linda Saltz

---------- FOLLOW-UP ----------

QUESTION: As i have mentioned many times before, our company does not have sale as we are the marketing office for the regulator, the only in coming money is from th regulator for our operating expense. So is this consider sale (income type)?

ANSWER: Yes it will be a sale type.  
You can call it "reimbursed expense income"  but is indeed a sale type

If you dont want the word "income" in the account name, you can call it
Reimbursed Expense Inflows or give it the same name your regulator calls it.

Linda Saltz

---------- FOLLOW-UP ----------

QUESTION: As above, earlier you mentioned, it should be :

Type = income
Name = sale

And now you said

Type = sale
Name =  reimbursed expense income

Which is opposite.. I am confused now.

I thought the account type should always be income?  And i can name it  whatever is suitable, but you answered differently each time. Please clarify.

Hi Farida

The type Should be Income (your computer software will not have a type of SALE)
Type is used by accounting software to determine where in reports the account balance should be
listed. The type also determines if the account is a debit balance (asset or expense) or credit balance account (Liabilities, equity, income).

I intended in my prior posts for Sales, reimbursed expense income, or reimbursed expense inflows to be all variations of the account NAME.  Pick the one best suited or create a
name that is most meaningful to the readers of the financial reports.

Linda Saltz, CPA

Quicken & Other Budget/Accounting Software

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Linda Saltz, CPA, QBalance.com


QuickBooks best practices, troubleshooting, accounting, tax We have over 70 pages of website content about QuickBooks tips, running a business, tax and business startup at http://www.qbalance.com


Accountant and CPA over 20 years. Specializing in accounting software for over 12 years, Certified QuickBooks Pro Advisor, QuickBooks seminar instructor since 1997.
Producer of www.QBalance.com over 100 pages devoted to QuickBooks help and support and training for small business owners in tax and accounting issues.

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