 Accounts receivable you'll remember is an accrual component. So if I look at the flowchart, that's when we enter the invoice So that's on the customer side of things if you're in a very simplified business Like you just get paid from YouTube or something then you won't have receivables You'll just record a deposit or if you have cash register sales No invoices so this is an accrual component So by definition if you have to track accounts receivable you've moved away from a Cash-based system and now you're on an accrual-based system because of the the need for you to track The accounts receivable so there could be timing issues with the accounts receivable now one of those issues could be for example that you enter the invoice When you enter the invoice you you actually did the work before the cutoff in our case You did the work in February, but maybe you entered the invoice in March for example So it's not a perfect system the fact that you the invoices recording the sale In terms of the timing frame because it's possible due to the billing structure that you actually entered the invoice After you did the work in the period after you did the work in which case you could result in an adjusting Entry that might not be as common for small businesses But you know that that's one of the issues that could happen the other issue is that Issue with the deposits that we talked about which we'll get into in more detail with the unearned revenue kind of issue Where we said it's possible to receive a payment Before you do the work like to get a down payment or you get a prepayment From the customer before you do the work that should be recorded as a liability But logistically within QuickBooks it makes sense to make a negative Receivable so if I looked at the sub ledger we'd have some negative receivables and we should break that out for financial reporting To a liability so from my perspective This is not a classic adjusting entry and that it doesn't have a balance sheet and income or timing difference account But it works like an adjusting entry in that from the bookkeeping standpoint It makes sense to have a negative receivable because that ties out really well in The sub ledgers because the sub ledgers are tied to accounts receivable as opposed to an unearned revenue But periodically then I can just go in there and make an adjusting entry if I need to so well That's a little bit of confusing one. We'll talk about that more later