Unearned Revenue Journal Entry

Unearned revenue is generated when a business supplies its services to a customer and the services are invoiced in advance.

For example, suppose a business provides maintenance services and invoices for annually in advance. At the time of invoicing the service has not been provided and none of the revenue has been earned, it therefore needs to be credited to the unearned revenue account.

Unearned Revenue Journal Entry November 6th, 2016Team
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Accrued Revenue

Accrued revenue is revenue which has been earned but not yet invoiced to a customer. Accrued revenue should not be confused with deferred revenue which is revenue received but not yet earned.

Accrued Revenue November 6th, 2016Team
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Deferred Revenue Journal Entry

Deferred revenue is generated when a business supplies its services to a customer and the services are invoiced in advance.

For example, suppose a business provides web design services and invoices for annual maintenance of £12,000 in advance. At the time of invoicing the service has not been provided and the service revenue has not been earned, it therefore needs to be credited to the deferred revenue account.

Deferred Revenue Journal Entry November 6th, 2016Team
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Services on Account

Service revenue is generated when a business supplies its services to a customer. The services can either be provided for immediate cash payment or more usually the services are provided on account and invoiced to the customer at a later date.

The invoicing of services on account means that an amount of money will be owed by the customer to the business, and this is referred to as a trade accounts receivable or trade debtor.

Services on Account November 6th, 2016Team
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