Deposits ...

Example A

Ong Enterprises.  You have found a client who will rent your spare car parking space, Vishy Traders.  They will pay $1000 per month plus GST and pay 3 months in advance ($3300 in total).  They will start renting on 1st July 2015.  On 5th June 2015, Vishy Traders pay a deposit of $500.

How does Ong Enterprises record this $500 cash deposit?

Cash Receipts Journal.
The term 'Deposit' is not used in the accounting system ... never, ever!  And, never ever use the term 'Lay-By'.  The $500 deposit is prepaid rent revenue.  Important.  Deposits do not attract GST.  Repeat ... deposits do not attract GST.  The GST will only be counted when the full amount is paid in advance, which is $3000 plus GST in this example.

Assume the the balance owing is paid on 30th June, $2800. ($3300 less $500 deposit = $2800).

Cash Receipts Journal.
In the 'Details' column, Prepaid Rent Revenue would be recorded.  $2800 in Bank, $2500 in Sundry and $300 in GST.  Note that the $300 GST is not 10% of the $2500 in the Sundry column.  This seems strange. The $300 is 10% of the full amount of prepaid rent, $3000, which is made up of the $500 deposit and the additional $2500 received later.

When the CRJ is posted, Prepaid Rent Revenue will be credited with $3000 ($500 + $2500).

PS;  I have never seen this example on a VCAA exam ... but the following deposit examples have appeared.

Example B.