Question: We are high special order and require 50% of the total sale down and our accountant wants the cash received to be recorded as a liability. How do we handle recording customer deposits as a liability?

This method uses the Receivable Aging Report to find the amount of customer deposits for the end of month procedures. It is highly recommended to print these reports on the last day of the month after all sales and payments been posted, and the ledger entries posted in general ledger. However, the reports are date sensitive and can be printed later if the store does not purge the receivables open file or merge revolving contracts.

Print the Receivable Aging Report to determine the credit balances. Use the following criteria:

Select “All” Customers.

Select “All” Profit Centers.

Select “All” Aging periods.

Select “Analysis only” in the Preferences group box.

Select “Only credit-balance customers” and “Include Charge offs” in the Preferences group box.

Enter the first day of the month in the “Begin Analysis” box.

Enter the last day of the month in the “Age as of” box.

Click the “Print” button.


Note: If you have more than one profit center, the reports can be run for one profit center at a time or combined. If the Balance Sheet accounts are separated by profit center, the customer liability can be entered by profit center.



Create a recurring journal entry dated the last day of the month for the amount determined in the previous step. Be sure to check “Auto Reversal.”

Credit the 1090-000 (Customer Deposits) account.

Debit the 200-000 (Accounts Receivable) account.

Print the ledger transaction list. Verify the accuracy of the transactions.

Post the ledger transactions.

Print the Receivable Aging Report to determine the debit balances. Use the following criteria:

Select “All” Customers.

Select “All” Profit Centers.

Select “All” Aging periods.

Enter “1” in Balance Due.

Select “Analysis only” and “Include Charge offs” in the Preferences group box.

Enter the first day of the month in the “Begin Analysis” box.

Enter the last day of the month in the “Age as of” box.

Click the “Print” button.

The balance under the Payment Aging column will be the total of the Accounts Receivable. Customers owing less than One dollar will not be included in the totals. This total should balance with the Receivables Account (200-000). This can be verified though View Ledger Accounts.


Note: If you have more than one profit center, the reports can be run for one profit center at a time or combined. If the Balance Sheet accounts are separated by profit center, the customer liability can be entered by profit center.