We run a record label, and we usually fund the creation of our own items that we sell....
We have a case where a band is self-funding one of our albums... and I'm curious how people would categorize this money coming in.
So Person X sent $1200 to us via Venmo that landed in our checking account. We then took the $1200 to pay for production of an album, paying it against a bill.
So balancing the books, it's easy to account for the $1200 going out... it's just money paid towards our expense of production.
But the $ coming in isn't sales... isn't income. And we wouldn't be paying it back to them. So it's not a liability... What would you classify that incoming money as? Not necessarily talking about the journal actions per se... but just the balancing of the account for reconciling. Would you mark that as undeposited funds? Or, just classify as incoming money somehow?
