Summary of Consumer Deposit Account Definition
- What type of account is customer deposits?
- What are the 4 types of deposit accounts?
- What is a consumer deposit account?
- What is a client deposit account?
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AI Overview
AI Overview
Customer deposits are treated as a current liability on the balance sheet because they represent payments received for goods or services not yet delivered
. Record the receipt by debiting Cash (Asset) and crediting a Customer Deposits account (Liability). When the service is provided, debit Customer Deposits and credit Revenue.
Accounting Steps for Customer Deposits
Receipt: When receiving money, debit the bank account (Asset) and credit a liability account (e.g., Customer Deposits or Unearned Revenue).
Recognition: Once the goods or services are delivered, reverse the liability by debiting the Customer Deposits account and crediting the Sales Revenue account.
Refunds: If the deposit must be returned, debit the Customer Deposits liability account and credit the Cash account.
Key Considerations
Classification: It is a current liability because it is generally settled within 12 months or less.
Purpose: It acts as a safety measure, as the company does not technically own the money until the service is rendered.
Tracking: It is essential to track these deposits by customer to maintain accurate, detailed records, often managed through QuickBooks.
Non-refundable vs. Refundable: In accrual accounting, even non-refundable deposits are generally treated as a liability until the service is performed.
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Consumer Deposit Account definition
Examples of Consumer Deposit Account in a sentence
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Your opt-out notice can be a letter that is signed by you that states “I elect to opt out of the arbitration clause in my Consumer Deposit Account Agreement for Account #” or any words to that effect.
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For additional terms and conditions that apply to this account, refer to the Consumer Deposit Account Agreement and Disclosures and the Consumer Fee Schedule, including our right to amend, modify, add to, or delete terms applicable to your account.
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See the Bank’s Consumer Deposit Account Brochure for a schedule of current fees.
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If your Oxygen Consumer Deposit Account is closed for any reason; the Savings Account will automatically be closed.
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You will have immediate availability to your funds once they are transferred from the Savings Account to your Oxygen Consumer Deposit Account, or from the Consumer Deposit Account to the Savings Account.
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If the balance of your Oxygen Consumer Deposit Account should become negative and then remain negative for fifteen (15) days, the funds, if any, in your Savings Account may be used to repay the negative balance.
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While the nature and frequency of transactions into and out of your Oxygen Savings Account are described in this Savings Account Agreement, please see Section II ELECTRONIC FUNDS TRANSFER DISCLOSURE AND SPECIAL TERMS AND CONDITIONS, of the Oxygen Consumer Deposit Account Agreement where your liability for unauthorized transfers from the Oxygen Consumer Deposit Account is explained.
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For consumer customers, this disclosure should be read together with the Consumer Deposit Account Agreement and Disclosures and the Consumer Fee Schedule that apply to your account, including our right to amend, modify, add to, or delete terms applicable to your account.
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If your Savings Account is cancelled, closed or terminated for any reason, any remaining balance will be transferred to your Oxygen Consumer Deposit Account.
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See the Bank’s Consumer Deposit Account Brochure, available at all City National Bank branches, for a schedule of current fees.