Discussion:Accounting for non-cash income

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Discussion Forum Index --> Accounting Questions --> Accounting for non-cash income

NWTaxPro (talk|edits) said:

21 June 2011
Client receives $500 of free office space as part of a service contract. Free office space along with cash are given in exchange for services and should definitely be taxed. How would I best account for this income in QuickBooks? Should I set up a income account called "non-cash income" then an asset account called "Office Space"? I can see a few ways of doing this and I wanted a second opinion.

Stuart (talk|edits) said:

21 June 2011
Wouldn't you just book the income (or relieve the receivable), and split the debit between bank and rent expense.

I may be off track, but are they related parties?

CathysTaxes (talk|edits) said:

21 June 2011
QuickBooks has a section in their Help where they tell you how to set up barter income.

This is what I do with bartering:

Set up a 'bank' account - Barter Account (as instructed by QB)
Set up a payment method for barter (Item Lists)

Invoice the client. - Debit A/R, credit Income/Sales account

When payment is 'received', I debit the Barter Account, credit A/R

So far, I have been the recipient of the bartered services (one client, a carpenter, put in wooden stairs, and replaced my roof), So I:

Credit Barter Account
Debit Draw Account

Bushmaster (talk|edits) said:

29 June 2011
Its nothing more complicated that the following.

Credit income

Debit rent expense

That is all you need to do.

TTMM (talk|edits) said:

30 June 2011
I agree with Cathy. Someday in the near future someone will say, I need to reconcile the barter between the two of us. You can reconcile it much easier that way.

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