 let's save it close it check it out save it and close it and let's go to the balance sheet and i'm going to run the balance sheet we'll just double check that everything happened the way we thought it might go into the accounts receivable scrolling down we're going to say then we've got this string music and there's the invoice it's increasing for the 530 that includes the sales tax so that's the whole thing here closing that back out scrolling back up and back to our balance sheet the other side usually is on the income statement let's run that to refresh it that most of it would go into the sales of product but this case only the portion related to the actual sale item when in there that's the six hundred dollars the one hundred dollar deduction reduction is not included so the six hundred went there where did the one hundred dollar negative one hundred dollar go it went to the liability account of unearned revenue so unearned revenue has now been earned so that means that the unearned revenue account should go back down to zero it's a clearing account in essence that's good so even though the unearned revenue doesn't have a a sub ledger account tracking the customer information we can just use it as kind of that that clearing account as we get the deposits if you want to use this method and then we've got the income up top the inventory went down like it normally would and so there's so there's that happening and i won't get into detail on the sub ledger for inventory because that's not really our focus and we've seen it before but the cost of goods sold no real difference on the cost of goods sold it's impacted by the the one line item that dealt with that dealt with the inventory and the impact on the income statement is the increase in revenue minus the cost of goods sold and then if i go to my sub ledger for the accounts receivable and run that now uh the uh who who's with string music was it string music where are you there they are there's the string music has the uh the 530 now it still looks a little bit different so if i go let's let's compare the full method now that it's been completed between the two methods here so if i go back to my customers i i'm in string music here and so if we if we look at we made an estimate and then we made a sales receipt and so when we made the sales receipt we got the 100 which usually would show up as something that would be unapplied automatically applied to the invoice then but in this case we used the sales receipt and applied it to unearned revenue so that wasn't exactly the same and then we created the invoice and the invoice had to take into consideration within the invoice this payment that was made in the past so it got applied out a little bit differently than the other methods so for so when i go into this invoice you can see that it got applied out up here instead of having it down here kind of in the note down below so again from a bookkeeping standpoint i don't think that is as nice as seeing the invoice being uh fully charged for the full invoice and then and then applying a payment to it as opposed to that that unearned revenue so this linkage between the forms to me is not as good an audit trail and it's a little bit more confusing from the bookkeeping standpoint but from a financial reporting standpoint it records the unearned revenue the way i would like to see it as we go and then if i look at if i compare that to the other customer Eric let's go to Anderson up top and see this is the method we used last time we made an estimate we actually made and then we made the payment based on the estimate and we ended up with this negative 300 payment which until we applied it out was showing as a credit just like it would if i was at that point i could see another example of a customer just so we can see it sales customers the other customer that we did this to was Sam the guitar man i think it was and if i scroll down here you've got this unapplied credit that's quite conspicuous and easy to see from the from the bookkeeping standpoint and a little bit more easy to see from that side back to the customers let's go back to Anderson and then back to Anderson here we had the 300 now notice that the 300 because it was in there as a payment it automatically applied to the invoice so notice that the invoice here then it is showing the total amount of the invoice which was partially paid and again i like that better from just an audit trail standpoint so if i if i look at the invoice i can see what was actually charged for the invoice and the and the amount of the invoice was recorded like a normal invoice transaction would and then the payment was applied to it down below so i didn't have this kind of meshing together within the invoice the customer deposit in the the heart of the invoice so that means when i look at the invoice i can say okay yeah this is the total of the invoice and then we applied out a payment to the invoice which again if we just compare that to the the other one here which was uh string music string music and i look at this we got the 100 we've got the hundred dollars paid but it's not going to automatically apply to the invoice i got to take it out of basically the unearned revenues so that means when i look at the actual invoice i don't get to see the full amount of the invoice minus the payment that was applied to it like i'd like to see from an internal kind of audit trail standpoint but rather i just kind of got to know that if i go in here i can see it clearly that that deposit was applied out and but i can't really see that as clearly if i was just looking at it here i got a sales receipt i could put in the memo hey look this was a sales receipt it was a customer deposit but it's a little bit less clear to see the link between these two so for my opinion uh if the this method that we're looking at here works better from a financial statement perspective to record your transactions on an accrual basis you know correctly as you record them and it might work on some kind of industries i'm thinking maybe that would be better to do if you're in like a service like company where you when you get uh you get all your money from gig from a subscription model or something like that all of your revenue is is uh prepaid or something and then you have to make periodic adjustments to it maybe that would be a better way to go but i think in this at least in this example to me when you're looking at like a deposit for for a one-time deposit thing i feel like the the negative amounts in here have a better internal bookkeeping process are easier on the bookkeeper and can easily be adjusted for periodically with adjusting entries for financial reporting purposes but it might change from company to company and that's just my opinion