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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.

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15y ago

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Related Questions

Is Unearned revenue a credit or a debit?

A credit


What is the entry unearned revenue?

[Debit] Cash / bank [Credit] Unearned revenue


Is Decrease in Unearned Rent Revenue a credit or debit?

Debit


What is the equation once unearned revenue has been earned?

[Debit] Unearned revenue [Credit] Sales revenue


What could be journal entries for unearned revenue?

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.


Do unearned fees go into an income statement?

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!)


What is the journal entry of cash collected from sale of tickets and recorded as unearned revenue?

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


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


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.


How would services related to unearned service revenue were performed look like on general journal?

In the general journal, services related to unearned service revenue would typically be recorded as a debit to the Unearned Service Revenue account and a credit to the Service Revenue account. This entry reflects the recognition of revenue as the service has now been performed. For example, if $1,000 of unearned revenue is earned, the journal entry would be: Debit Unearned Service Revenue $1,000 and Credit Service Revenue $1,000. This entry indicates that the obligation to provide the service has been fulfilled.


Unearned revenue is initially recognized with a?

credit to unearned revenue


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