So, I'm generating my profit/loss report so I can file my income tax return, and
notice I have two problematic invoices in my "Income" list: one invoice was
partially paid and remains open, as it's a long-term project; the other is
closed, but was paid half before 1/1/16, the other half after. The report is
insisting on counting both of these as income /in full /for last year. It's not
a huge sum of money, and probably won't make much of a difference in my return,
but would like dates the income was collected (or not) to be properly reflected
in the report. Thanks for any suggestions.
I am not an accountant - but it is my understanding that if you are
reporting on a cash basis you reduce your income by the year-end Balance
Sheet amount of 'Accounts Receivable'.
That balance sheet line item should include the un-received payment
shown in the income statement.
Yes, if working on "Cash Basis" you claim only supplier invoices paid by you
and customer invoices collected by you within the accounting year.
If working on "Accrued Basis" you claim all supplier invoices issued to you
and customer invoices you have written, dated within the accounting year
whether or not you have paid the invoice or your customer has paid you.