Cash Revenue from External Sources

Some recharge operations may generate cash revenue from goods and services provided to a non-University entity (i.e., a third party). If more than 50% of revenue will be obtained from this source, the operation may not fit the definition of a recharge operation. Contact the Manager of Current Unrestricted Funds for information as to the correct classification of the operation under those circumstances. Subaccounts in the range 0800 through 0819 are used to record cash revenue from external sources.

Services or goods sold to third parties on credit (i.e., billed sales) should be recorded as follows. A receivable, equal to the amount due, should be recorded in the general ledger (Ledger 0) account and a corresponding credit recorded in the appropriate cash revenue subaccount. When payment is received, it should be recorded in the receivable account to reduce the amount owed by the third party. If cash is received at the time of the sale, the revenue may be recorded directly to the cash revenue subaccounts.

If bad debts are incurred as the result of non payment of a billed sale, cash revenue should be reduced by the amount deemed uncollectible. See the Bad Debt Expense Funding and Receivables from Sales to Third Parties sections for related information on bad debt accounting.

See Appendix D, Recharge Operation Accounts Receivable Accounting Protocol, for detailed transaction information..