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    alysons's Avatar
    alysons Posts: 1, Reputation: 1
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    #1

    Sep 3, 2008, 06:13 PM
    Shipping company misses promised delivery date
    Company loses revenue due to shipping company missed delivery date. Shipping company agrees to pay company lost revenue due to missed delivery date. Do we record the shipping company's check as revenue or credit to shipping/cogs accounts?
    delite's Avatar
    delite Posts: 202, Reputation: 3
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    #2

    Sep 3, 2008, 09:18 PM
    Quote Originally Posted by alysons
    Company loses revenue due to shipping company missed delivery date. Shipping company agrees to pay company lost revenue due to missed delivery date. Do we record the shipping company's check as revenue or credit to shipping/cogs accounts?
    Set up a lliabilty for shipping co acceptance of liabity;the contra is your companys asset.if payment is made, reverse liability being record as income
    AdamUTsel's Avatar
    AdamUTsel Posts: 100, Reputation: 2
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    #3

    Sep 4, 2008, 08:06 AM
    I'm not sure I follow this answer. It's not feasible to set up a liability for someone else's liablity.

    If the revenue is "earned", you should record it and set up a receivable account. The receivable account is relieved when payment is actually received for the company's error.

    If there is a contingency on whether they will pay this, you should have an allowance for uncollectables already in place to catch the fall.
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