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January 8, 2019

Recording part of the security deposit

  • January 8, 2019
  • 2 replies
  • 0 views

Hi.

We are a transportation company and we take a security deposit from our drivers which we reimburse when they leave the company.

I created an account called  Drivers Security Deposits (other current liabilities) where I record the amount received from each driver for security deposit.

When they leave, sometimes we need to charge them for damages, repairs, etc.

My questions is how I should record the amount that we are not refunding, so the balance for the liability account to be zero? Should I use an expense account?

Thank you!

 

    2 replies

    January 9, 2019

    Yes, you should reduce the liability by recording to the same expense account where the damage/repair costs were recorded.

    Hope this answers your question.

    Nancy in Arizona

    ProAdvisor

    dfrancoeur65
    January 22, 2019

    I'd be interested in how you are managing a high volume of security deposits? It gets pretty tedious to log all of this activity (for us, it is about 40+ deposits a month) and our accounting team came up with a workaround using a qb/Stripe for payments.

    Is your team using anything special for this? I am looking for any way to improve efficiency.

    Thanks!