Course Description

In most industries, it is normal to get paid after a job is done. However, what do you do if someone pays you ahead of time? The job is not done yet, so you can’t recognize the revenue. Also, have you ever had to make a deposit on something ahead of time? If so, then you can’t recognize the expense yet, since it has not been incurred. These situations happen all the time, but many practitioners just getting started struggle to know what to do in these instances. In this course, we will be talking about unearned income and prepaid expenses. We will talk about how the accounting differs for cash and accrual basis taxpayers, and what to do on the tax return.

Learning Objectives

  • State what the terms unearned income and prepaid expenses mean and when these situations come up.

  • Identify revenue recognition and expense recognition applicable to unearned income and prepaid expenses.

  • Recognize the tax implications of unearned income and prepaid expenses.

Additional Required Materials

  • Level: Basic

  • Field of Study: Accounting (NASBA)

  • Practitioners that are new to the industry or bookkeeping. Also, small business owners looking to do their own bookkeeping.

  • Required Knowledge: None

  • Advanced Prep: None

Instructor

CPA, CPCU, MST, MBA David Peters

David Peters is the Founder and Owner of Peters Tax Preparation & Consulting in Richmond, VA. He has over fourteen years of experience in financial services, including 3 years in the hedge fund industry and six years in the insurance industry. David was the first-ever Chief Financial Officer at Compare.com - a position he held for over three years. He is a national CPE Instructor/Discussion Leader for the AICPA, Surgent, and Kaplan. He regularly teaches courses in accounting, finance, insurance, and ethics throughout the United States. He holds four Masters degrees and contributes regularly to various CPA publications, including NCACPA’s Interim Report, SCACPA’s CPA Report, and VSCPA’s Disclosures. He was also a co-author of the 2018 Virginia CPA Ethics course – a required course for all CPA’s licensed in the Commonwealth of Virginia.