I'm the treasurer for a small non-profit club. The books I inherited and our federal 990-EZ return are cash basis. Membership dues are due at the end of our fiscal year, so the dues received in a given year may be a lot different than the dues earned. To show the dues actually earned, is it OK to use an adjustment account to attribute the revenue to the proper year, or isn't that allowed for cash-basis accounting? If it is allowable, should the actual or earned revenue be reported on the federal return? What is the right way to handle this?
Thanks for your advice.
Bill Bickner