[GNC] Revisiting the pre-paid invoice (coupon, credit note ...) issue:

Adrien Monteleone adrien.monteleone at lusfiber.net
Tue Jul 12 23:06:48 EDT 2022


A negative asset is effectively a liability. It is part of a concept 
called 'contra' accounts. You can have contra-liability accounts too, 
that are effectively assets.

Asset - normally a Debit balance - amount you own.
Contra-Asset - Credit balance - amount you owe someone else. (liability)

Liability - normally a Credit balance - amount you owe.
Contra-Liability - Debit balance - amount someone owes you. (Asset)

Our replies I'm sure got crossed. I go into more specific detail for the 
posted use case, but essentially, I'd do it the same way - post the 
pre-payment to AR, then apply it after posting an invoice when I do the 
work.

Regards,
Adrien

On 7/12/22 9:29 PM, David Long wrote:
> Hi,
>   one way I know works, but is a bit ugly, is to create your prepayment
> account as a negative current asset. I do something similar as some members
> of a club incur expenses on its behalf, which goes to their current account
> as a negative asset, and I then use this to clear off invoices in their
> receivable account using the invoice payment process which is equivalent to
> your item 4 below.
> Ugly though, as on the balance sheet report the current accounts not yet
> cleared of to A/R appear as a negative asset rather than in the liability
> section.
> Regards
> David Long




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