REMEMBER: Purchasing Goods & Services Should Be Charged To An Expense Account
This is a reminder that purchased goods and services should generally be charged to an expense account, i.e. an account that begins with ‘6’.
We have noticed recently that purchases have been incorrectly charged to revenue accounts. i.e., those that begin with ‘4’. I offer the following as a couple of examples.
- Catering services acquired from Sodexo were incorrectly charged to revenue account 45316-Catering Services rather than expense account 60103-Catering Svcs.
- Participant support payments were incorrectly charged to revenue account 45138-Participant Fees rather than expense account 60200-Participant Costs.
Generally, revenue accounts (those that begin with ‘4’) should only be charged if paying a refund of previously collected revenue.
Again, when selecting an account for goods or services being purchased, please note whether the account begins with ‘4’ or ‘6’. Some of our revenue accounts (begins with ‘4’) and our expense accounts (begins with ‘6’) have very similar descriptions.
If you have further questions, please reach out to Darla Reynolds, CPA, Director of Accounting, at darlab@maine.edu