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3 15 revenue principle

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Unformatted text preview: bly assured. (4) Collection is reasonably assured. 3-15 Revenue Principle If cash is received before the company delivers goods or services, the liability account UNEARNED REVENUE is recorded. Cash received before revenue is earned ­ Cash Received Cash (+A) xxx Unearned revenue (+L) xxx 3-16 Revenue Principle When the company delivers the goods or services UNEARNED REVENUE is reduced and REVENUE is recorded. Cash received before revenue is earned ­ Cash Received Company Delivers Cash (+A) xxx Unearned revenue (+L) xxx Revenue will be recorded when earned. Unearned revenue (­L) xxx Service revenue (+R) xxx 3-17 Revenue Principle Typical liabilities that become revenue when earned include . . . CASH COLLECTED (Goods or services due to customers) REVENUE over time will (Earned when goods become or services provided) Rent collected in advance Rent revenue Unearned air traffic revenue Air traffic revenue Deferred subscription revenue Subscription revenue 3-18 Revenue Principle When cash is received on the date the revenue is earned, the following entry is made: Company Delivers AND Cash Received Cash (+A) xxx Revenue (+R) xxx...
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