Accounting question and thanks to the development crew....

[Rich Shepard]

On Tue, 12 Nov 2002, S. Barret Dolph wrote:

> I provide teachers, books, and a teaching method to schools in Taiwan. 
> (I provide the software they provide the hardware.) Almost all students 
> pay tuition for three months. At the outset this payment is a liability. 
> (I am obliged to provide services for those three months.) It is only 
> after the term is over that my profit is realized. Any suggestions on 
> how to enter this on the Gnucash system?

Barret,

  Have you considered using cash accounting rather than accrual accounting?
I assume from what you wrote above that the students pay in advance. You can
enter this as revenue when received. Create another (expense) account for
refunds, in case you need to return any money to a student.

  I'm not an accountant, but I suggest that the payment in advance is _not_
a liability in accounting terms because you do not need to repay that money.
You are obligated to provide the services for which you were paid, but
that's a legal liability, not an accounting one.

  You should ask your accountant how s/he wishes this to be handled.

Rich

Dr. Richard B. Shepard, President

                       Applied Ecosystem Services, Inc. (TM)
            2404 SW 22nd Street | Troutdale, OR 97060-1247 | U.S.A.
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