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Why are credit sales recognized as revenue even though no cash has yet been received by the business?
Wiki User
∙ 13y ago
A credit card sale is the bank guaranteeing a business the money. The only way a business would not get the money from a credit card transaction is if the bank would go out of business (pretty slim odds)
AnswerI am not sure the above answers your question.
Credit sales are sales made to customers with credit terms i.e. the customer pays later e.g. 30 days after the customer receives the goods or service.
Accruals accounting measures the performance and position of a company by recognizing economic events regardless of when cash transactions occur.
When revenue is reported it reflects the actual performance of the company and sales team.
If it were based on when cash is received the performance of the company would be distorted by customers paying late.
Wiki User
∙ 13y ago
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Unearned revenue is initially recognized with a?
credit to unearned revenue
Is unearned revenue a credit balance?
Yes, Unearned revenue has credit balance and it is liability for business until it is actually earned.
Is revenue a cash or debit?
Revenue is always credit as all revenue accounts has credit balance as normal balance and cash received or accounts receivable is debit against it.
When payment is received for services not yet rendered no entry is recorded until that service has been rendered?
When payment received without services: Debit Cash / bank Credit Unearned revenue When services rendered: Debit Unearned Revenue Credit Services revenue
What is meant by ANR in credit card Business?
Annual Net Revenue
Is revenue always recognized when cash is collected?
no. revenue could be accounted for in a prior period. For example: Debit Accts Rec. Credit Sales. then Debit Cash. Credit Accts Rec. later in the future.
Is unearned service revenue debit or credit?
Unearned services revenue is that part of revenue which is not yet earned and as it is not yet earned then it is liability for business and hence like all other liabilities it has credit balance as normal default balance.
What is journal entry for received cash for services?
[Debit] Cash / bank [Credit] Services revenue
Is revenue a credit or debit?
Revenue is income or a credit.
When a product or service is delivered for which a customer advance has been previously received what is the appropriate journal entry?
[Debit] Unearned revenue [Credit] Sales revenue
What is the journal entry for revenue received from professional fees?
cash a/c debit fees a/c credit
What is the organization through which Hope Credit benefits can be received?
The organization through which Hope Credit benefits can be received is called Internal Revenue Code. It deals with tax law in the United States of America.
