On 13015 receipt of the payment from the town means

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On 1/30/15, receipt of the payment from the town means that the Cash account (an asset) should be increased (with a debit) by $50,000 and the Accounts Receivable account (also an asset) should be decreased (with a credit) by $50,000.
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1.2.3.Payments Received in Advanced Remember that at first glance the Deferred Revenue account can be a bit confusing. Even though it has the word ‘revenue’ as part of its name, it is not a revenue account. Deferred revenue (also sometimes referred to as unearned revenue) is a liability account. It represents the obligation to provide goods or services that has not yet been fulfilled. Thus, the revenue is deferred, or not yet earned, but at some future date when the goods or services are provided, the liability will be converted into revenue. Deferred revenue is a liability that represents the obligation to provide goods or services to a customer in the future. Deferred revenue is recorded when a business receives a payment in advance from a customer, but the business has not yet delivered the good or provided the service. Once the business fulfills its obligation to provide goods or services, the liability is reduced and the revenue is recognized. May also be referred to as unearned revenue. Remember that deferred revenue is NOT revenue. Suppose Bikram Yoga Natick sold six 3-month yoga memberships on July 1, 2013 for a total of $2,100. All of the customers paid in cash at the time of the purchase. What impact would the receipt of cash have on this date? On July 31, 2013, the yoga studio had provided one month of services out of the three-month agreement. What would be the impact when Bikram Yoga Natick records the services provided for the month?
On July 1, 2013, when the memberships were sold, the Cash account (an asset) should be debited to show the amount received ($2,100) and, since the revenue has not been earned and Bikram Yoga Natick is obligated to provide the yoga classes, the Deferred Revenue account (a liability) should be increased (credited) by the amount of funds received ($2,100). On July 31, 2013, Bikram Yoga Natick has earned one month's worth of the revenue and reduced their obligation by the same amount so they should reduce (debit) the Deferred Revenue account (a liability) for $700 and increase (credit) the Revenue account (part of owners' equity) for $700, one-third of the initial advance. 1.2.4.Prepayments Similar to Deferred Revenue, the Prepaid Expense account can be confusing at first glance. Even though it has the word ‘expense’ as part of its account name, it is not an expense account. Prepaid Expense is an asset account. It represents an amount that has been prepaid by the business, and thus the business now has the right to receive goods or services in the future. Prepaid expense will be converted into an expense at a later date, when the goods or services are provided. This, again, is an example of accrual accounting and the matching principle.

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