Problem
What is Receivables Basis?
Solution
Receivable Basis entails an accounts receivable entry being created in the general ledger for each transaction where fees are charged.
For example: A customer signs up for a one-year pass membership that costs $1200. The total sales tax for this transaction is $48. At the time of the registration, the customer does not make a payment. As a result of this transaction, a debit of $1248 is posted to the receivables account (payment type 96). A credit is posted to the revenue account (payment type 96) for $1200 and a credit is posted to the sales tax liability account (payment type 96) for $48.
When the customer makes a payment towards this pass membership, the receivables account is credited for the amount of the payment and an offsetting debit is posted to cash (or the appropriate form of payment).