debit cash
credit interest on investment
debit cash / bankcredit unearned revenue
Earned Revenue = The revenue benefits of which have been provided to customers Unearned Revenue = The amount of which is already received but the corresponding benefits or services have not yet been provided. Example: Amount received to provide repair services next month. So when next month services will be provided that unearned revenue become earned revenue.
Unearned revenue is taxable because cash has received and mostly tax authorities charge tax on amount received and not when it is earned.
The journal entry for prepaid income is a debit to the Cash account and a credit to the Unearned Revenue account. The Unearned Revenue account is a liability. The rationale for such an entry is that this is income received in advance. This means that the income has not been earned since the services have not yet been performed. When the services have been performed it is appropriate to recognize the revenue and offset the liability account, unearned revenue.
false
yes
debit cash / bankcredit unearned revenue
debit cash / bank / accounts receivablecredit revenue account
Accrued revenue refers to revenue that has been incurred (earned) but not yet received.
Initial receipt of unearned revenue from a customer for service to be provided in the future. Recognition of the unearned revenue as the service is performed and earned. Adjustment entry to reflect the portion of unearned revenue that has now been earned.
Unearned revenue is liability for business as amount is received but services are not provided that's why it is liability until it is earned and shown in balance sheet.
Earned Revenue = The revenue benefits of which have been provided to customers Unearned Revenue = The amount of which is already received but the corresponding benefits or services have not yet been provided. Example: Amount received to provide repair services next month. So when next month services will be provided that unearned revenue become earned revenue.
Unearned revenue is taxable because cash has received and mostly tax authorities charge tax on amount received and not when it is earned.
The journal entry for prepaid income is a debit to the Cash account and a credit to the Unearned Revenue account. The Unearned Revenue account is a liability. The rationale for such an entry is that this is income received in advance. This means that the income has not been earned since the services have not yet been performed. When the services have been performed it is appropriate to recognize the revenue and offset the liability account, unearned revenue.
Under the Accruals basis of accounting, Sales Revenue is recognised when it is earned and not when received.
False. Under the accrual basis of accounting, revenue is recorded when earned, not necessarily when cash is received. Revenue is earned when a sale is made, whether the customer pays cash or makes the purchase on account.
Unearned ravenue is liability account as revenue is not yet earned but cash received.