check written last year, received and cashed this year.

[whistleclient]

i'm sorry. i'm fairly certain it belongs to fiscal year 2006, but i want to make certain...

 

[EMPshockwave82]

I would ask an accountant for this one. Since I suck at accounting I will leave with only that advice 😛

 

[HardcoreRobot]

received the cash in 2006, seems like it would be 2006 income

im not an accountant

 

[TipsyMcStagger]

you are on cash basis as an individual, claim it in 2006

 

[galperi1]

Isn't the general rule that if the check was available to cash in 2005 and you chose not to, it should be included in 2005?

 

[JS80]

Depends on what the payment is for. Needs more detail.

 

[MikeyIs4Dcats]

if it was for income for a sale or employment in 2005, it belongs in 2005.

 

[smack Down]

Which ever year you make less money.

I would say the correct answer is in which ever year you earned the money.

 

[GuitarDaddy]

Depends on which accounting method you are using. "Cash basis" (most individuals and some small companies), or "Accrual basis" (most companies)

Cash basis - revenue and expenses are recognized at the point of the cash transaction

Accrual basis - revenue and expenses are recongnized at the point of sale/exchange of merch. or performance of service


Companies using the accrual method, where shipping is involved in the sales transaction also must record revenue based on there shipping terms.

FOB shipping point - As soon as it leaves the sellers dock the seller recongizes revenue
FOB destination - Seller can't realize revenue until confirmation of reciept at destination


A little accounting 101 for you non beans🙂