Account receivable is classified as an asset because it is the amount that the company will receive on behalf of the services that it has provided.
Accrual Accounting
When a company provides its services or delivers its goods before the payment is received is called accrued revenue.
๐๐ง๐๐๐ซ๐ง๐๐ ๐๐๐ฏ๐๐ง๐ฎ๐: ๐๐ก๐๐ง ๐๐ญ ๐๐๐๐จ๐ฆ๐ ๐๐๐ซ๐ง๐๐? Facebook Linkedin Pinterest Twitter The questions like what is unearned revenue? How to calculate it and โฆ
๐๐จ๐ฐ ๐ญ๐จ ๐๐ซ๐๐ฉ๐๐ซ๐ ๐๐จ๐ง๐ญ๐ซ๐จ๐ฅ ๐๐๐๐จ๐ฎ๐ง๐ญ? ๐๐ฑ๐๐ฆ๐ฉ๐ฅ๐ ๐๐ง๐ ๐ ๐จ๐ซ๐ฆ๐๐ญ Facebook Linkedin Pinterest Twitter How does the control account work? And which accounts does โฆ
Under the revenue recognition principle, revenue is recognized when itโs earned, not when cash is received.
๐๐๐๐๐ซ๐ซ๐๐ ๐๐๐ฏ๐๐ง๐ฎ๐: ๐๐ซ๐๐๐ญ๐๐ ๐๐ฌ ๐ ๐๐ข๐๐๐ข๐ฅ๐ข๐ญ๐ฒ ๐๐ซ ๐๐๐ฏ๐๐ง๐ฎ๐? Facebook Linkedin Pinterest Twitter Have you ever got payment for something before delivering services? โฆ
๐๐จ๐ง๐ญ๐ซ๐ ๐๐ฌ๐ฌ๐๐ญ ๐๐ฌ ๐๐จ๐ง๐ญ๐ซ๐ ๐๐๐ฏ๐๐ง๐ฎ๐- ๐๐จ๐ฐ ๐๐จ ๐๐ก๐๐ฒ ๐๐ข๐๐๐๐ซ? Facebook Linkedin Pinterest Twitter Contra Asset vs Contra Revenueโฆ. If you are wondering โฆ
Modified accrual accounting recognizes revenues only when measurable and available. And recognize expenses when they incur.
When an asset losses its value or there is a reduction in its market value, this reduction in value is referred to as Asset Impairment.
A contra account reduces the balance of its associated account and also recognizes the reason for reducing it.