Bookkeeping Question - Credit Against Future Charges

[John Morris]

Hi Benjamin,
  I'm not an accountant, but I'll give you my thoughts anyway.

  This credit you received is never income. You paid for a service from your landlord (a working phone system), but did not receive that service. This credit is the landlord's way of making up for that payment. Therefore, I would balance the opening balance of your prepaid credit account against the expense account you normally use for your rent of the suite or the phone system or whatever you normally pay to the landlord. In effect, you have paid less for your rent and you will pay in the future for your use of the conference room by using up some of the credit you received from the landlord.

Best,
John

> On Dec 18, 2016, at 3:35 PM, Benjamin Soffer (SLF) <bsoffer at soffer-law.com> wrote:
> 
> Thank you for answering my accounting question.  Your answer raises a follow-up accounting question.  Is this truly “income?”  It seems like it only becomes “income” if an when I incur an appropriate conference room charge, but it has not ripened into “income” quite yet.