Accounting systems are classified as either ”cash” (meaning income and expenses are classified as received/paid on the date shown on the bank statement) or ”accrual” (meaning income and expenses are classed as received/paid on the date due).
Most SMSFs use accrual-based accounting systems, but often a dividend or distribution assessed as payable for the current financial year is not actually received until after June 30.
Trustees may receive a number of dividend and distribution payments in early July that should be counted in the income for the year ended June 30.
There are two steps to posting these receipts.
- Firstly, they are posted as Receivables (or Payables, if expenses). The applicable date is the due date. The amount is debited to Accounts Receivable.
To complete Step 1:
From the Income Tab, choose to ADD NEW INCOME.
Click SAVE INCOME.
Next, the actual receipt is posted to the Receivables account as a credit.
To Complete Step 2:
You can either make a Journal Entry as below:
- The applicable date is the date actually received.
- The Account must be the same account that was Debited with the income entry above (Dividends receivable, Distribution Receivable, or Income Receivable)
- The amount will show as a Debit to the bank account on the date received.
This step can be completed manually from the Income Tab or by Data Feed allocation.
Locate the Receipt
Select RECEIPT FROM DEBTOR from the INCOME category
Mclowd displays the EXPENSE screen, pre-populated.
Check that the data is correct and click ADD EXPENSE
Currently, Mclowd does not enable correct allocation of received income (this is on the list of issues for remedy), and therefore a journal entry is required to transfer receipt from Accounts Receivable to Dividends, Distributions or Income receivable so that it cancels out the balance in that account.
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