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.
A credit
[Debit] Cash / bank [Credit] Unearned revenue
When payment received without services: Debit Cash / bank Credit Unearned revenue When services rendered: Debit Unearned Revenue Credit Services revenue
[Debit] Unearned revenue [Credit] Sales revenue
Not right away. When you record unearned fees or revenue it only hits the balance sheet. Ex: Debit- Cash or AR (Asset Account) Credit- Unearned Revenue (Liability) It is a liability until the revenue is earned in which case you then Debit: Unearned Revenue Credit: Revenue/Sales Account (finally and income statement account!)
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.
A credit
[Debit] Cash / bank [Credit] Unearned revenue
Debit
[Debit] Unearned revenue [Credit] Sales revenue
When payment received without services: Debit Cash / bank Credit Unearned revenue When services rendered: Debit Unearned Revenue Credit Services revenue
[Debit] Unearned revenue [Credit] Sales revenue
Service Revenue is credit in nature because it is an income.
Not right away. When you record unearned fees or revenue it only hits the balance sheet. Ex: Debit- Cash or AR (Asset Account) Credit- Unearned Revenue (Liability) It is a liability until the revenue is earned in which case you then Debit: Unearned Revenue Credit: Revenue/Sales Account (finally and income statement account!)
Cash collected from sales of tickets should be charged to sales rather then unearned revenue so the correct entry is as follows: [Debit] Unearned Revenue xxxx [Credit] Sales revenue xxxx
If you sell goods that have yet to be delivered you would create an account for unearned revenue. Unearned revenue is a liability account because you are still liable to produce those goods so if you are increasing the amount of unearned revenue you would credit the account, however if you are decreasing the unearned revenue, meaning you have supplied the goods to the customer, then you would debit the account.
cash debit with 6000 and unearned revenue is 5000 credit and and account payable credit