converting liabilities

[Greg Feneis]

Are accounting questions prohibited here?  I see them asked and answered by
KIND people all the time.

Kind regards,

Greg Feneis


On Thu, Sep 29, 2016 at 5:27 AM, Mike or Penny Novack <mpnovack at mtdata.com>
wrote:

> On 9/28/2016 4:48 PM, Robert Merkal wrote:
>
>> To Whom It May Concern:
>>
>> how are security deposit liabilities converted to either income or
>> expense after tenant leaves?
>>
>>
>> Sincerely,
>> Marion Merkal
>>
>
> That is NOT a  gnucash question. You are asking how to book these funds if
> you end up keeping them and that depends on whether you are legitimately
> keeping them and the reason why legitimate. For examples:
>
> a) The tenant left damage being which cost you as much (or more) to have
> fixed than the amount of the deposit. You had an expense (the repairs)
> which would have been entered as an expense and now you are offsetting all
> or part of that expense (if the security deposit more than covered that,
> you should have returned that balance --- properly submitting copies of
> your repair receipts.)
>
> b) The tenant leaving was a violation of lease terms (notice of quitting).
> This is more difficult. That you had a "loss" of income because of time to
> get a new tenant in probably is not an expense. It is going to depend on
> the rules of your jurisdiction whether you can keep the deposit in this
> situation, consult your lawyer/accountant. Similarly whether you should
> treat as income (offsetting part or all of the lost income).
>
> c) You are keeping these funds but not for a legitimate reason (according
> to the rules of your jurisdiction). I am not able to advise. Again, consult
> your accountant.
>
> Do you see now why I say NOT a gnucash question?
>
> Michael D Novack
>
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