A deposit refers to an amount of money that is paid into a bank account, typically for safekeeping or to be held as a credit towards future transactions or purchases. Deposits can be recorded in various ways in accounting, depending on the specific transaction and the type of deposit.
Accounting Example:
A Payment of $10 for the full Deposit amount is added onto an Invoice with a Deposit requested on the same date:
Parent Account | Account | Transaction / Reference | Date | Debit | Credit |
Cash | Petty Cash | Payment / Invoice | Jan 1, 2022 | 10.00 | - |
Customer Deposits | Customer Deposits | Payment / Invoice | Jan 1, 2022 | - | 10.00 |
Leveraging Railz to use Journal Entries for Deposits:
While Railz provides /deposits endpoint to POST deposits, this is not supported by all Accounting Service Providers. In such cases, you may follow the below steps to add a deposit as a journal entry:
Identify the account that is being deposited. This will typically be a cash or bank account.
Determine the date and amount of the deposit.
Create a journal entry for the deposit. The debit account will be the bank account that is being deposited into, and the credit account will depend on the source of the deposit.
Include a brief description of the deposit in the journal entry. This could include the customer name, the invoice number, or a description of the source of the deposit.
Payload example:
You can use our POST /journalEntries endpoint to add a $10 debit line item, for example, from the cash account and a $10 credit line item, for example, for the accounts-receivable account.
{
"connection":
{
"businessName": "{{businessName}}",
"serviceName": "{{serviceName}}"
},
"data":
{
"currency": "USD",
"currencyRate": 1.3,
"postedDate": "YYYY-MM-DD",
"lines":
[
{
"accountRef": "ID OF CASH ACCOUNT FROM ASP - SEE COA END POINT ",
"description": "LINE ITEM DESCRIPTION",
"amount": 10,
"type": "debit"
},
{
"accountRef": "ID OF ACCOUNTS RECEIVABLE FROM ASP - SEE COA END POINT ",
"description": "LINE ITEM DESCRIPTION",
"amount": 10,
"type": "credit"
}
],
"memo": "SOME MEMO"
}
}
For more information: