What is the journal entry for deferred revenue?
What is the journal entry for deferred revenue?
A deferred revenue account is a liability for a company as shown on the liability side of the balance sheet. It is a payment made by the customers to a company for the goods and services that are yet to be delivered by the company. For example, ‘A’ company is a retail store that delivers candy; a customer pays rupees 180 as a subscription yearly. So 1/12th of deferred revenue becomes income revenue each month, that is 15 rupees. Below is the journal entry for deferred revenue.
Date
Account
Debit
Credit
1/10
Cash account …………………………..Dr.
180.00
To deferred revenue account.
180.00
(being paid for a candy subscription)
Date
Account
Debit
Credit
1/10
Deferred revenue……………………….Dr.
15.00
To revenue
15.00
(being one month of candy subscription)
Also read:
A deferred revenue account is a liability for a company as shown on the liability side of the balance sheet. It is a payment made by the customers to a company for the goods and services that are yet to be delivered by the company. For example, ‘A’ company is a retail store that delivers candy; a customer pays rupees 180 as a subscription yearly. So 1/12th of deferred revenue becomes income revenue each month, that is 15 rupees. Below is the journal entry for deferred revenue.
|
Date |
Account |
Debit |
Credit |
|
1/10 |
Cash account …………………………..Dr. |
180.00 |
|
|
To deferred revenue account. |
180.00 |
||
|
(being paid for a candy subscription) |
|
Date |
Account |
Debit |
Credit |
|
1/10 |
Deferred revenue……………………….Dr. |
15.00 |
|
|
To revenue |
15.00 |
||
|
(being one month of candy subscription) |
Also read:
