Double-Entry Accrual Accounting Concept [closed]

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I have an accounting question regarding property management.

Step 1: Residential Owner: Peter

I charge Peter $200 for month management fee. So:

Type      Name     Debit Account        Credit Account      Amount
------    -----    ------------------   --------------      ------    
Charge    Peter    Management Income    Acc Receivable      200.00      

Step 2:

I charge Peter $50 for Gas Utilities. So:

Type      Name     Debit Account        Credit Account      Amount
------    -----    ------------------   --------------      ------   
Charge    Peter    Utilities Income     Acc Receivable      50.00      

Here my balance for Acc Receivable = 250 and Management Income = 200 And Utilities Income = 50.

Now, Peter is going to pay me $200 for the management fee... so

Step 3:

Type      Name     Debit Account        Credit Account      Amount 
------    -----    ------------------   --------------      ------ 
Payment   Peter    Acc Receivable       Management Income   200    

Here my balance for Acc Receivable = 50, Management Income = 0 and Utilities Income = 50

I have seen that the payment automaticaly generates another record in the Undeposited Funds because is money I received but that has not been deposited in the bank yet.

My question is what is the Debit Account and Credit Account for that transaction or how can I handle it.

Type      Name     Debit Account        Credit Account      Debit     
------    -----    ------------------   --------------      ------    
Payment   Peter    Undeposited Funds        **???**         200.00      

Because when I deposit that amount I know that the next record should look like this:

Type      Name     Debit Account        Credit Account      Debit     
------    -----    ------------------   --------------      ------    
Deposit   ME       Bank Account         Undeposited Funds   200.00   

Any clue on how to deal with this?? When the Undeposited Funds record is created what is the credit account??

Thanks

Answer 1

EDIT: Think of the following example: When you send a check to the phone co. to pay your bill, the first thing the phone co. does when they receive your check is to credit the balance due on your account and debit a suspense account called "Check Deposits". When your check clears in the phone company's bank account, the phone co. credits "Cash in Bank" and debits "Check Deposits". If your check bounces, the phone co. will credit "Checks Bounced" and debit your account balance with that amount plus the service service charge.

EDIT (Think is the solution):

For example

1. I charge a residential owner with 200 for maintenance fee.. in that moment I record 2 transactions: 1) will debit 200 to Maint. Income Account 2) will credit 200 to Receivables Account.

2. The residential owner pays 200 for the maintenance fee.. in that moment I record 3 transactions: 1) will debit 200 to Receivables Account 2) will credit 200 to Maint. Income Account 3) will debit 200 to Undeposited Funds Account (asset acct).

3. I go and deposit the 200 payment into my bank account... in that moment I record 2 transactions: 1) will debit 200 to Bank Account 2) will credit 200 to Undeposited Funds.

This way my balances will show like this:

Account            Debit    Credit    Balance
Maint. Income      200      200       0
Receivables        200      200       0
Undep. Funds       200      200       0
Bank Account       200      0         200

I think this solutions works... just created the database tables and everything is matching fine.... what do you think?

hmm, why would you debit the bank account instead of crediting the bank account?.. If you debit the bank account 200, the balance would be -200.

Answer 2

In terms of accounting, when you receive a payment from a customer, you credit the customer and debit "undeposited funds". Then when you deposit the money in the bank, you debit the bank and credit "undeposited funds".