The invoice still debits accounts receivable and credits sales; the payment Credits accounts receivable and debits cash. If you were to use my second option, all your cash invoices would be for Mr. Cash Sales, and at the end of the year, all things being honest, would approach a balance of zero.
The transaction summary would be along the lines of the following: 1. Sell the item: DR Accts Rec (Mr. CS) CR Sales 2. Book the cash: DR Cash, CR Accts Rec (Mr. CS) If it is a real credit customer, then you would apply the DR and CR to the correct customer, of course. In the event that the cash sale was incorrectly paid, and the odds of refunding overpayments or collecting underpayments approaches zero, then one would use an account in the ledger called "Cash Over/Under" or such like. These accounts are nearly always present in any system that uses one of more tills; the odds of a till being exactly correct at the end of a busy day are almost as long as the lottery odds. This would show the invoice as fully paid, and set the difference off. The auditors will expense/revenue the item at the next audit. "Ben Petersen" <[EMAIL PROTECTED]> wrote: >Hi Albert, > >Still stumped. (Probably a forest for the trees thing <g>) > >We receive partial payment of an invoice. >I debit cash (checking). >Where do I make the credit entry? >How does this effect the invoice? > >We receive payment in excess of the invoice. >I debit cash (checking). >I can now book the invoice using part of the payment received (credit income). >Where do I credit the balance of the payment? > >tia, > >Ben Petersen > > > >On 19 Aug 2003, at 14:50, Albert Berry wrote: > >> 1. Create a second Receivable account for Cash transactions, and treat >> everything in there the same way as the Client Receivables (where one expects >> the bills to be paid after the fact). This allows write down/up at the end of >> the year, and supplies the auditors with >> >> 2. (My personal preference) Set up a Customer called "Cash Sales" and use >> him/her for the cash transactions. >> >> >> "Ben Petersen" <[EMAIL PROTECTED]> wrote: >> >> >Hi Bill, >> > >> >My question really relates more as to how partial/over payments against >> >invoices are treated in the general ledger for cash based systems, rather than >> >billing. (What do you do with the cash?) But Thanks! >> > >> >Ben Petersen >> > >> > >> >On 19 Aug 2003, at 9:57, William Stacy wrote: >> > >> >> I use a transaction view that includes �a transaction table and a >> >> transaction detail table. �In the detail table, all chargable items have an >> >> item number (that links them to other, item tables), a quantity, �a regular >> >> price/fee/amount per unit, a computed column that is the product of the >> >> quantity and the price, and a final price (discounted/agreed amt, etc). All >> >> payments and other credits receive negative signs and go in the final price >> >> column, so the "balance" of a transaction is simply the sum of the price >> >> column, which will be positive if a balance remains, negative if a credit >> >> balance is created, and zero if the payment/credit totals equal the charged >> >> amounts. �This way I can create statements, bills, insurance claims etc from >> >> this one view. >> >> >> >> bill >> >> >> >> Ben Petersen wrote: >> >> >> >> >Hi all, >> >> > >> >> >I'm down to the nitty gritty of an accounting package and wanted to make >> >> >sure my take on accounts receivable for cash based customers was accurate. >> >> > >> >> >For straight up transactions where there is an invoice and a payment for >> >> >that invoice nothing hits the GL until payment is made. But in the instance >> >> >where someone _partially_ pays an invoice, or, over-pays an invoice, this is >> >> >what I've been doing in past systems: >> >> > >> >> >Debit cash for the payment amount. >> >> >Credit A/R for the payment amount. >> >> >Debit A/R for the invoice total. >> >> >Credit income accounts for the items on the invoice. >> >> > >> >> >In the case of under-payment this leaves an A/R balance. In the case of >> >> >over- payment there is a negative A/R balance. >> >> > >> >> >In my re-write everything is driven by views, so it is possible to have a >> >> >circumstance where new invoices work directly against the customer account >> >> >to reduce the credit and not be posted through A/R. My concern is that while >> >> >it makes the A/R portion of the GL cleaner, it is possible, for example, to >> >> >have an invoice detailed in A/R at one moment, and not the next, if a new >> >> >invoice brought the customer account to zero. While the transactions would >> >> >explain "what happened" I don't know that this is acceptable. >> >> > >> >> >I'm looking for some outside confirmation and/or alternatives. >> >> > >> >> >Thanks >> >> > >> >> >Ben Petersen >> >> > >> >> >. >> >> > >> >> > � >> >> > >> >> >> > >> > >> >> >> -- >> Albert Berry >> Full Time Consultant to >> PSD Solutions >> 350 West Hubbard, Suite 210 >> Chicago, IL 60610 >> 312-828-9253 Ext. 32 >> >> >> __________________________________________________________________ >> McAfee VirusScan Online from the Netscape Network. >> Comprehensive protection for your entire computer. 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