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Hi, sorry for the entry level query but I'm not a trained accountant, just a charity bookkeeper trying to prepare our year-end files for the auditor and tidy up all the cost centres on Xero!
I have a couple of year-end debtors to post where payments related to subscriptions that extended beyond the year in question into the subsequent year. I can't get my head around the logic of whether the debtor should be for the full amount or just the amount relating to the year in question! Please can someone help me because I seem to have a mental block on this...
Example: In October 2024, Charity X paid £240 for a subscription covering the period 1October 2024 - 30 September 2025. This cost was to be split 50/50 with Charity Y. So Charity Y owes Charity X £120.
Charity Y paid their debt of £120 in January 2025.
So do I do the year-end debtor for the total owed £120... and then a prepayment for £180 (being the portion of the full amount paid that relates to the following year)?
Or do I just do the year-end debtor for £30 because the remainder of what was paid in 2025 belongs in 2025 anyway?
And if so, how much is the year-end prepayment for (brain explodes...)
Hope this makes sense and sorry if it's a daft question. Thanks for helping me with it!
I have a couple of year-end debtors to post where payments related to subscriptions that extended beyond the year in question into the subsequent year. I can't get my head around the logic of whether the debtor should be for the full amount or just the amount relating to the year in question! Please can someone help me because I seem to have a mental block on this...
Example: In October 2024, Charity X paid £240 for a subscription covering the period 1October 2024 - 30 September 2025. This cost was to be split 50/50 with Charity Y. So Charity Y owes Charity X £120.
Charity Y paid their debt of £120 in January 2025.
So do I do the year-end debtor for the total owed £120... and then a prepayment for £180 (being the portion of the full amount paid that relates to the following year)?
Or do I just do the year-end debtor for £30 because the remainder of what was paid in 2025 belongs in 2025 anyway?
And if so, how much is the year-end prepayment for (brain explodes...)
Hope this makes sense and sorry if it's a daft question. Thanks for helping me with it!