I need to understand how to account for grant money I received for my business. I put the Vendor as the organization that gave me the grant, but what category do I use?
Thanks for your answer, but I do have a follow up question.
This grant money that I won't have to pay back. So can you explain a little more about why to put it in a liability account? I though liability accounts were for things I had to pay back. Or is this just a holding place until the end of the year?
Assuming I do put it in a Liability account.
If at the end of the year I do have to pay taxes on the non governmental grant I got. Do I need to move that money into an income account that will be taxed. That I name "other taxable income" or something like that.