Accounting Guidance For Real Estate Investment Step By Step
Accounting guidance for real estate investment step by step
In 10 steps you can manage real estate investment accounts in your company from opening accounts to collecting premiums, selling unit, selling final and showing final accounts
The first step
is to impose a project on behalf of the October Housing Complex. There are two basic accounts for any real estate investment project that should be established in the guide. First Account: October Real Estate Investment under the Real Estate Investment Account and the Second Account under the Cost of Sales Account.
The second step
is to register the units of the project from apartments, shops, garage or basement, explaining the selling value of each unit and the cost
Units of October Residential Complex
The third step
Establishing customer contracts and determining payments and installments and dates of entitlement and other conditions of the contract For example, was contracted with Dr. Esawi on the apartment # 1 first round amount and the capacity of 440 thousand pounds were determined payments and installments as shown in Figure
The fourth step
Once the contract has been established with the customer, there must be two accounts in the directory. Account on behalf of the customer under the customer account and another account in the name of the customer under the customer account. Payments submitted to date.
There are no financial transactions. All administrative activities.
The fifth step
is to collect the payment of the booking from the customer in cash of 140 thousand pounds and the accounting record as shown
Proof of expenses during the financial period For example, proof of expenses through the settlement of a good custody or through the purchase of materials or bonds of cash or checks
Closing the expenses The end of the financial period in the real estate investment account shall be repeated and closed every financial year until the project ends
Prove the actual sale and revenue generation and the composite entry will be explained in detail
A very important step is to close the cost of sales of the unit in the investment property account
You can make 3 previous steps in one constraint as follows
- Proof of sale at full sales value 440,000 LE Client indebtedness and income of real estate investment complex October creditor
- Proof of closing the account of the payments made to the customer in the customer's account in the amount of the payments paid by the reservation payment of 140 thousand pounds
- Reduction of the account of real estate investments with a cost of housing unit of 340 thousand pounds cost of sales city and real estate investment creditor
- The cost of sales is shown in the income statement and the remaining balance of the investment property account is shown in the balance sheet and with the last sold unit, the investment property account should be written off
Collection of remaining payments and installments Once the sale has been established from the moment the final sale is established, the customer is dealt with directly and any premium collected is the customer and not the prepayment account.
Client Account Statement We note that the customer owes the value of the unit and a creditor with the value of the prepayments and a creditor in the amount of the premiums collected after the sale has been proven
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