Accountıng I Deneme Sınavı Sorusu #1313682

What is deferred revenue?


Deferred revenue, also known a sort of revenue, refers to payments a company already received for products or services in the past. 

Delivery of the good or service to the customer, but the deferred revenue is not reclassified as an asset.

In deferred revenue, revenue is recognized before the cash is received.

Deferred revenue, also known as unearned revenue, refers to advance payments a company receives for products or services that are to be delivered or performed in the future. 

The deferred revenue  is an expense and  decrease in owner’s equity that results from operations.


Yanıt Açıklaması:

If cash is received in advance (before revenue is earned), a liability account (called as deferred revenue) will be used as a correspondence to cash account, a liability account called deferred revenue is used as a correspondence to cash account.

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