The accrued and deferred income and expenditure journals below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of accruals and deferrals.
Accrued and Deferred Income and Expenditure Examples
In each example the accrued and deferred income and expenditure journals show the debit and credit account together with a brief narrative. For a fuller explanation of accrued and deferred income and expenditure journals, view our accruals and deferrals tutorial.
Accrued Revenue and Expenditure Journals
Revenue
| Account | Debit | Credit |
|---|---|---|
| Accrued revenue | XXX | |
| Revenue | XXX |
Expenditure
| Account | Debit | Credit |
|---|---|---|
| Expenses | XXX | |
| Accrued expenses | XXX |
Deferred Revenue and Expenditure – Asset and Liability Method
There are two methods of recording revenue and expenditure deferrals, this first is the asset and liability method shown immediately below, and the second is the revenue and expenses method detailed later in this post.
Revenue
| Account | Debit | Credit |
|---|---|---|
| Cash | XXX | |
| Deferred revenue | XXX |
| Account | Debit | Credit |
|---|---|---|
| Deferred revenue | XXX | |
| Revenue | XXX |
Expenditure
| Account | Debit | Credit |
|---|---|---|
| Deferred expenditure | XXX | |
| Cash paid | XXX |
| Account | Debit | Credit |
|---|---|---|
| Expense | XXX | |
| Deferred expenditure | XXX |
Deferred expenditure is sometimes referred to as prepaid expenditure or simply prepayments.
Deferred Revenue and Expenditure – Revenue and Expense Method
This is the second method of posting deferred revenue and expenditure, the first is the asset and liability method shown in the section above.
Revenue
| Account | Debit | Credit |
|---|---|---|
| Cash | XXX | |
| Revenue | XXX |
| Account | Debit | Credit |
|---|---|---|
| Revenue | XXX | |
| Deferred revenue | XXX |
Expenditure
| Account | Debit | Credit |
|---|---|---|
| Expense | XXX | |
| Cash paid | XXX |
| Account | Debit | Credit |
|---|---|---|
| Deferred Expenditure | XXX | |
| Expense | XXX |
Deferred expenditure is sometimes referred to as prepaid expenditure or simply prepayments.
About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.