Is this deposit a prepayment??????

bobbynailer
bobbynailer Registered Posts: 21
in AAT student discussion
I'd really appreciate it if you could help me on this matter: £25 has been paid as a deposit in 2016 for an expense that will fully incur in 2017 do I record this as 'Payment on Account' in sage like any other deposit or shall I treat as a prepayment,

Thank you in advance

Comments

  • Bertie
    Bertie Registered Posts: 373
    Are you (the company) paying the deposit, or are you in receipt of the deposit?

    If you are paying it would be a prepayment.

    If you are receiving it would be classed as deferred income / payment on account. It shall be displayed as a liability in the SFP.

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