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-   -   Recording of unpaid program fees (https://www.askmehelpdesk.com/showthread.php?t=359740)

  • May 31, 2009, 12:23 AM
    M79ll6
    Recording of unpaid program fees
    If a nonprofit organization informally requests the payment of program fees via email from scheduled participants, but also permits those who have stated that they cannot or will not pay, to attend using the word "scholarship" to describe this option, it seems appropriate to record these entries with all being applied as a credit to "program revenue" or "unearned program revenue" as the case may be, with the debit being applied to either "accounts receivable" or "scholarships expense" as appropriate. But, when some of the individual attendees who were expected to pay in fact do not pay even after several informal reminders, and the organization does not want to further pursue payment, what should be the journal entry to record that adjustment? Would the debit go to "loss on bad debts" or would it go to "scholarships expense?" It seems that the solution to this question may lie in the concept of "substance over form," but perhaps there is yet a more precise directive. Can you provide an answer to this question and also direct me to the authoritative guidance that supports the solution?
  • May 31, 2009, 04:55 AM
    ROLCAM

    The answer seems to be very simple.
    If they have not been booked in the books,
    There is nothing else to do.
    If they have been booked already,
    Then what you need to do is reverse
    The original entries.

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