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Let's say I rent a car for $300 and I don't pay upfront. The car rental company issues me Invoice #1.

I return the car and have used excess mileage, so owe an additional $50.

I pay with my credit card; just one transaction for $350.

Should the car rental company update Invoice #1, adding another line item for $50? Or should they create Invoice #2 for $50?

Thank you.

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  • Why is it important for you how many invoices they give you?
    – JohnFx
    Commented Jan 1 at 1:26

3 Answers 3

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An "invoice" is typically only provided after all of the terms of the transaction are complete. Your initial agreement is not an "invoice" but a "rental agreement" that lists the agreed-upon charges, which may include some variable charges that are not final until the rental is over.

So the actual "invoice" would be for $350.

How you put it in quickbooks is up to you. It's not clear why you would list it as two transactions. They're not really "updating" the invoice - they're creating an invoice based on the terms of the agreement and any charges that were not known upfront (like gas or mileage)

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    invoices are provided before payment, after payment it is called "receipt"
    – littleadv
    Commented Dec 20, 2023 at 20:59
  • True - I was more distinguishing the agreement (before completion) from the invoice. In reality there's not really an "invoice" since the charges are paid for right then.
    – D Stanley
    Commented Dec 20, 2023 at 22:06
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Think of it as the same as checking out of a hotel. You come in, your starting bill is $350. You get some room service, use the mini bar. You check out and it's now $457. That's your final invoice, one and only.

Your rental contract operates in a similar manner. It remains open until it is concluded with a single invoice amounting to $350.

There is no reason to make 2 accounting entries for that.

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Neither. The should provide a receipt for $350.

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