Prepaid Services (Unearned Income, Unearned Revenue)
rshgeneral
rshgeneral at yahoo.com
Mon Aug 17 18:57:38 EDT 2009
I'm a new gnucash user helping someone switch from quickbooks. I'm not sure
how gnucash handles prepaid services. In accounting, I believe I would
credit (increase) a Prepaid Services account (a liability account) and debit
(increase) a checking account. Using this process would produce the correct
accounting result, however, I just want to be sure that there is not already
a proper way to do this in gnucash using invoices. I'm not even sure if you
are supposed to create an invoice for a prepaid service. Whenever I try to
create an invoice, it allows me assign it to an income or liability account
(i like). When I try to post the invoice, I'm restricted to posting it to
Accounts Receivable (i dont like).
Should invoices be used for Prepaid Services? Or should I just utilize
general ledger transactions until the service is performed and then create
the invoice and take the payment?
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