How to write an accounting entry when a real estate agent is required to return the house payment
When a real estate enterprise sells a newly built house, the customer needs to prepay a part of the deposit. When a customer refunds under special circumstances, the account of advance receipts will be involved. What is the specific accounting entry?
Accounting entry of real estate payment return
1. Upon receipt of refund:
Debit: bank deposit
Credit: advances from customers/other payables
2. When refunding:
Debit: advances from customers/other payables (red ink)
Credit: bank deposit (red ink)
3. In case of wrong remittance, the overpayment can be included in other receivables;
Debit: other receivables
Credit: bank deposit
4. Receive returned overpayments:
Debit: bank deposit
Credit: other receivables
What is advance receipt?
Advance receipt refers to the purchase deposit or part of the payment received by the enterprise from the buyer in advance. Advance receipt is a liability incurred by the buyer to pay part (or all) of the payment in advance to the supplier based on the agreement or contract between the buyer and the seller. This liability will be repaid by future goods or services.
When the enterprise receives the money, the sales contract of goods or services has not been fulfilled, so it cannot be recorded as income, but can only be recognized as a liability, that is, credited to the "advance receipts" account.
After the enterprise provides goods or services according to the provisions of the contract, according to the performance of the contract, it will turn the unrealized income into realized income one by one, that is, debit the "advance receipts" account and credit the relevant income account.
The presentation of accounts receivable in advance is based on the nature of the balance. The debit of accounts receivable is classified into the debit of accounts receivable for the nature of assets, and the credit of accounts receivable is classified into the credit of accounts receivable in advance for the nature of liabilities.
What are other receivables?
Other receivables refer to all kinds of receivables and temporary payments other than financial assets for resale, accounts receivable, prepayments, notes receivable, dividends receivable, interests receivable, reinsurance accounts receivable, reinsurance contract reserves receivable, subrogation receivables, long-term receivables, etc.