How to categorize the water amp and fire dues being paid by tenants?
I just got a client who has a mobile home park with 180 lots. I noticed that some tenants in some months pay water and fire dues plus their monthly rents. When I tried to understand how the previous accountant was recording these, I noticed that sometimes she was recording it as “rental income” and some times as “water & fire dues expense” to offset the expenses!
Unfortunately when I went back to previous years I saw that this inconsistency was going on from the beginning. Now I want to at least to clean up 2020 but I am not sure if I should record them as a water or fire due income or just as water or fire due expense!
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