If I was doing a transaction summary for the year 2006, and one of the transaction summaries was:
"Signed a $25,000 service contract to start Feb 2007"
Should I even debit and credit something? Because it was just signing a contract.
2006-09-26 10:13:59 · 6 answers · asked by glenn b 2 in Education & Reference ➔ Homework Help
Accrual basis accounting you have to credit a payable "Service Contracts Payable" and debit an asset possibly called Service Contracts I believe.
2006-09-26 10:19:30 · answer #1 · answered by ToServe 2 · 0⤊ 0⤋
I'm not really sure what you are asking. To increase an asset or expense account you debit it. To increase a liability, equity or revenue account you credit it.
2016-03-27 11:38:13 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I would call that a contingent asset and reveal it as a supplemental note in the accounts but if an invoice hasn't been issued yet you cannot record it as a transaction in the accounts.
2006-09-26 10:20:33 · answer #3 · answered by Anonymous · 0⤊ 0⤋
contracts are contracts and (depending on the small print) are legally binding. you gave them ability to sue you and possibly hold things that are important to you away from you.
only do it if you can actually fully afford the monthly payments and fully want what you are paying for.
on that note. 25 grand ain't that much over a few year period.
2006-09-26 10:18:17 · answer #4 · answered by B.B Top 3 · 0⤊ 0⤋
you signed a contract
did you receive any money for is it paid for ?
2006-09-26 10:18:56 · answer #5 · answered by Anonymous · 0⤊ 0⤋
no.. i dont believe you record that... unless you have taken in some sort of deposit.. then that would be recorded as unearned income with a note as to why you have it..
2006-09-26 10:22:30 · answer #6 · answered by limgrn_maria 4 · 0⤊ 0⤋