Booking of received rental deposits from our tenants.
December 9, 2011 | 25,00 EUR | answered by Michael Herrmann
We receive security deposits from our tenants transferred to our business account. I have booked these as follows upon receipt:
Debit 1200 (Bank) to Credit 1732 (received deposits)
In order for these amounts to no longer appear on our bank account, I have now transferred them as follows to the account Foreign Funds 1592:
Debit 1592 (Foreign Funds) to Credit (Bank)
Now I have other assets under the account 1592 Foreign Funds in the balance sheet on the asset side and the same value under the account 1732 received deposits in the balance sheet on the liability side.
Is this correct? Or how do I book these deposits so that they are neutral? Thank you for your help.
Dear inquirer,
First of all, thank you very much for your inquiry, which I would like to answer based on the information provided and in the context of your engagement within an initial consultation. The response is in accordance with the description of the situation. Missing or incorrect information about the actual circumstances can affect the legal outcome.
In principle, the deposits have been recorded on a neutral basis. However, the position of external funds is intended for funds that do not belong to you and are to be forwarded in the short term. Regarding the deposit, there is a contractual claim on your part. The custody account must be included in the balance sheet.
Therefore, you would, for example, book Custody account (1201) to Bank (1200). It is important that this entry is only permissible if the money has actually been transferred to a separate account. Otherwise, the amount is included in the bank balance and must remain there from an accounting perspective. It is not permissible to separate a portion of the bank balance.
I hope that these explanations have provided you with a sufficient overview of the situation within the scope of your engagement and this initial consultation and remain
Yours sincerely,
Michael Herrmann
Tax consultant
Diploma in Financial Management (FH)
