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Income received in advance is a current liability because you (or the company) has not fulfilled its obligation in earning this income.
For example, say you sale computers and someone pays you $1,500 for a computer and you are going to have the computer to them in maybe 14 days, they have prepaid you in anticipation that you will fulfill your obligation and send them the computer. If anything happens and you are unable to fulfill this and send them the computer, you are liable to return the money they paid you for this.
Once the computer is sent, the Income is then removed as a liability and is reported as earned income. The accounts used to record such a transaction are..
Debit Cash
Credit Unearned Income
Once the obligation is fulfilled we then remove this entry from unearned income by
Debiting Unearned Income
Crediting Income (many companies use Revenue)
What else can I help you with?
Cash received in advance what is journal entry?
income received in advanceincome a/c drTo income received in advance A/Cso i think herecash ac drto cash received in advance i am not sure better check with some expertsincome received in adv is a liability and shown on liabilityu side in balance sheet.
How do you book advance rent with current Invoice?
Party A/c Dr. To Adv. Rent Received To Rent Received To Output Service Tax
What are the ratings and certificates for Adv- Lakshmanan Ladies Only - 2010?
Adv- Lakshmanan Ladies Only - 2010 is rated/received certificates of: India:U
What does adv stand for in the sec form adv?
ADV = Avisor Disclosure Vett
What is Adv Technology?
What is Adv Technology
Abbreviation for advanced?
adv. although that could be mistaken for adverb.
do u do billboard adv. in this area if not who does?
bill board adv. who “do u do billboard adv. in this area if not who does”
What other words can you use other than fast?
apace adv. [poet] brisk adj. briskly adv. expeditious adj. expeditiously adv. mobile adj. nippy adj. (Brit.) [sl.] prompt adj. quick adj. quickly adv. rapid adj. rapidly adv. slippy adj. spanking adj. speedily adv. speedy adj. swift adj. swiftly adv.
When was Panavia Tornado ADV created?
Panavia Tornado ADV was created in 1985.
What does the abbreviation Adv Life Course Res stands for?
ADV stands for Adverb.
What is the synonym for synchronistic?
coeval adj. coevally adv. coexistent adj. coincidental adj. coinstantaneous adj. concomitant adj. concurrent adj. concurrently adv. contemporaneous adj. contemporaneously adv. at once gleichzeitig at the same time simultaneous adj. simultaneously adv.
Who is the president of ADV Films?
ADV Films was shut down in 2009. John Ledford and Matt Greenfield were the owners of the company when ADV Films company was declared bankrupt and shut down.
