[Solved] Income adjustments
November 2019 rental check was lost and then found and deposited in January 2020. I am not sure how to post correctly in 2020. Is there anything adjustments that can be done? Otherwise, rental income will be overstated in 2020. Wondering? Wendyc
On a cash basis, it would be 2020, accrual basis, assuming an invoice was sent in 2019, it would be 2019.
If you are using accrual basis, then 2019 should have a shortage because you have an outstanding receivable that hasn't been received (on your balance sheet) & it was earned in 2019. So you will record your rent income in 2019 instead of 2020 & this should reduce your AR figure on your BS.
Under cash basis, it will have to be reported in 2020 since that is the year the $$ literally got received. Yes, the 2020 income will be overstated and when the auditors ask you an save an explanation and say it's for 2019. Also, you 2019, should show income as understated as the $$ was never received in 2019 & the auditors should see that.