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.

When a company provides its services or delivers its goods before the payment is received is called accrued revenue.

𝐔𝐧𝐞𝐚𝐫𝐧𝐞𝐝 𝐑𝐞𝐯𝐞𝐧𝐮𝐞: 𝐖𝐡𝐞𝐧 𝐈𝐭 𝐁𝐞𝐜𝐨𝐦𝐞 𝐄𝐚𝐫𝐧𝐞𝐝? The questions like what is unearned revenue? How to calculate it and recognize it? When is …

𝐇𝐨𝐰 𝐭𝐨 𝐏𝐫𝐞𝐩𝐚𝐫𝐞 𝐂𝐨𝐧𝐭𝐫𝐨𝐥 𝐀𝐜𝐜𝐨𝐮𝐧𝐭? 𝐄𝐱𝐚𝐦𝐩𝐥𝐞 𝐚𝐧𝐝 𝐅𝐨𝐫𝐦𝐚𝐭 How does the control account work? And which accounts does it adjust or control …

Under the revenue recognition principle, revenue is recognized when it’s earned, not when cash is received.

𝐃𝐞𝐟𝐞𝐫𝐫𝐞𝐝 𝐑𝐞𝐯𝐞𝐧𝐮𝐞: 𝐓𝐫𝐞𝐚𝐭𝐞𝐝 𝐀𝐬 𝐀 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐎𝐫 𝐑𝐞𝐯𝐞𝐧𝐮𝐞? Have you ever got payment for something before delivering services? Or have an online …

𝐂𝐨𝐧𝐭𝐫𝐚 𝐀𝐬𝐬𝐞𝐭 𝐕𝐬 𝐂𝐨𝐧𝐭𝐫𝐚 𝐑𝐞𝐯𝐞𝐧𝐮𝐞- 𝐇𝐨𝐰 𝐃𝐨 𝐓𝐡𝐞𝐲 𝐃𝐢𝐟𝐟𝐞𝐫? Contra Asset vs Contra Revenue…. If you are wondering what is the difference …

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.