Showing results for 
Search instead for 
Did you mean: 
Level 1

Applying expense in this FY to next FY

Our FY runs Sept-Aug. We have a large event that will take place in our next FY, but we are receiving income for and paying expenses that event in the current FY. How is the best way to apply this income/expenses to next FY?


Thank you. 

1 Comment 1
Level 9

Applying expense in this FY to next FY

If you follow GAAP accrual-basis accounting, when you receive money for work not yet completed, you have Deferred revenue (also called Unearned revenue, which means customer paid in advance).


For this, debit Cash (asset) account on date you received the money. (QB account "Bank"). Credit side of entry must go to liability account called Deferred revenue (=Unearned/Customer advance).


That amount is a liability since you owe it back to customer until you complete the work as paid. As you earn revenue, move amounts from unearned to earned revenue. May be all at once or in pieces. 


Need to get in touch?

Contact us