Should the 'income account' for a service that is billed hourly and invoiced be accounts receivable, and if yes, does it come out of A/R when the invoice is paid?
Should the 'income account' for a service that is billed hourly and invoiced be accounts receivable, and if yes, does it come out of A/R when the invoice is paid?
I currently have the income account as 'sales', but I haven't kept that consistent. I'm trying to sort out my chart of accounts now that I have some more basics.
Should the 'income account' for a service that is billed hourly and invoiced be accounts receivable, and if yes, does it come out of A/R when the invoice is paid?
No, the income account on an item should be an income account
the accounting flow when you create an invoice
item sale prices are totaled and posted to the accounts on those item screens
sales tax is posted to sales tax payable
the total is posted to accounts receivable
when you receive payment
accounts receivable is lowered
undeposited funds is increased
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