Since a deposit is something that will (theoretically) be returned to you, is it an ‘expense’ ? I mean, it leaves your checking account and isn’t available to you for a long time. Should I show it as an expense w/ a later matching amount under ‘income’ ???
I would set it as an expense and then once it does finally get returned mark it as the same category ( still an expense)
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I handle it like richl suggests — sort of.
We have rental properties. I categorize security deposits as positive Income when we get it and negative income when we return it.
If we don’t return all of it because of unusual repairs that were necessary, I split the transaction. The portion returned to the tenant goes to negative Income and the portion withheld goes to an expense category reserved for each rental property. e.g. Property 1 Repairs and Maintenance.
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Correct, I took the position of the renter here, but your way is exactly true for the landlord