How is what I'm saying incorrect? An invoice is evidence of an economic event, it is not itself an economic event.
--- Si Chen <[EMAIL PROTECTED]> wrote: > Chris, > > Just for the record, I don't think what you're > saying is correct. > > On Dec 4, 2006, at 10:27 AM, Chris Howe wrote: > > > Not to call your accountant out, but WOW! > > > > If the transfer of ownership of the fixed asset > > occurred when the setup services were performed, > there > > is only ONE economic event that is occurring and > > should be recorded as such: > > > > Dr Fixed Assets - $1,000,000 > > Dr Shipping Expense - $50,000 > > Dr Professional Services expense (or something > > similar) - $150,000 > > Cr Accounts Payable $1,200,000 > > > > However, if the transfer of ownership of the fixed > > asset occurred when the item was shipped, and then > at > > a later date the item was setup, then there are > TWO > > economic events. > > > > Dr Fixed Assets - $1,000,000 > > Dr Shipping Expense - $50,000 > > Cr Accounts Payable - $1,050,000 > > > > Dr Professional Services expense (or something > > similar) - $150,000 > > Cr Accounts Payable - $150,000 > > > > An invoice is a request for payment. Stop making > it > > out to be something that it is not. A company's > > account of their assets and liabilities has > changed > > regardless of whether a request for payment has > been > > made. Their assets and liabilities do not change > > because a request has been made (or an even more > > absurd assertion, that the request has been > received). > > This is why we have separate entities for > invoices > > and gL. Please use the correct entities. > > Best Regards, > > Si > [EMAIL PROTECTED] > > > >
