Customer deposits (prepayments)are recorded -

Question

Quizplus · Accepted Answer

Customer deposits (prepayments) are recorded as credits to accounts receivable for the customer, indicating that the customer owes less money in the future. This is not a negative sales invoice, which would indicate that the company owes money to the customer. It is also not a debit to accounts receivable, as this would indicate that the customer owes more money, not less. Finally, it is not necessarily when the customer makes a partial payment on account, as prepayments may be made before any services or products are provided.

Customer Deposits (Prepayments)are Recorded -