Deferred Revenue Bookkeeping Question

by Ellen
(Texas)

Deferred Revenue

Can a deferred revenue be credited with a debit to Accounts Receivable? My business has deposits received for future services rendered.

We like to set up A/R for the remaining amount that will be paid at a later date (ie. when service completed)

Also, should I use estimates instead of invoices to record these remaining balances in QuickBooks. Hope you can help!
Thanks

INCOME

by CLAUDIA FLEMING
(CAMERON PARK, CA, USA)

HOW DO I RECORD PREPAID INCOME? FOR EXAMPLE, 1ST AND LAST MONTH'S RENT PAID IN JANUARY (RECORDED IN JAN) AND TENANT LEAVES IN JUNE, LAST MONTH, WITH JUNE ALREADY PAID FOR IN JANUARY

Hello Claudia,

Thank you for contributing with your question.

Prepaid income is recorded as a current liability on the balance sheet. Using the above example with one month's rent equal to $1,000.00, your entries would be as follows:

1st and Last Months rent received in January is recorded in January as:

Debit $2,000 to the Bank account (asset)
Credit $1,000 to Rent Income account (revenue)
Credit $1,000 to Prepaid Income account (liability)

The tenant leaving in June is recorded in June as:

Debit $1,000 to Prepaid Income account (liability)
Credit $1,000 to Rent Income account (revenue)

Thanks again for your question!

Revenue

Service revenue in conjunction with the sale of merchandise is an example of what?

Is this a multiple choice? :)

I'm not so sure that I'm understanding the question, but am thinking the answer is possibly a Commission(?)

Does anyone else agree or have a different answer?

Revenue

If accounts payable pays the bank a 500.00 payment would the bank and the cash account both increase or decrease and increase respectivlly or increase and decrease respectively or both decrease which one?

Revenue vs. Deposit

by Jackie
(Houston, TX)

I'm a bookkeeper for a small engineering firm. Each month the partners want to see a cash flow of checks received and end of the quarter they look at the P&L. This last quarter the Total Profit was different from Deposit detail. They want an explanation. I'm not a degreed accountant nor do I even have my full charge bookkeeping license. I do get how the jests of GAAP acct'g. But do not have a good way to explain why this is happening. We are using quickbooks and we do Job costing. Some invoices get paid through reimbursables already expensed, and some do not. How do I track this, and how can I explain this number will never match up, b/c of dates, etc.

Am I even right here?

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