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? The questions like what is unearned revenue? How to calculate it and recognize it? When is it transferred from the balance sheet to the income statement? All these questions are addressed here just read ahead! What Is Unearned Revenue? Unearned revenue can also be calledย deferred revenue. It is the …
๐๐จ๐ฐ ๐ญ๐จ ๐๐ซ๐๐ฉ๐๐ซ๐ ๐๐จ๐ง๐ญ๐ซ๐จ๐ฅ ๐๐๐๐จ๐ฎ๐ง๐ญ? ๐๐ฑ๐๐ฆ๐ฉ๐ฅ๐ ๐๐ง๐ ๐ ๐จ๐ซ๐ฆ๐๐ญ How does the control account work? And which accounts does it adjust or control particularly? Here are answers to these simple yet thought-provoking questions. Letโs have a look at the simple explanation given below. What Is Control Account? A control account works as an adjusting and controlling …
Under the revenue recognition principle, revenue is recognized when itโs earned, not when cash is received.
๐๐๐๐๐ซ๐ซ๐๐ ๐๐๐ฏ๐๐ง๐ฎ๐: ๐๐ซ๐๐๐ญ๐๐ ๐๐ฌ ๐ ๐๐ข๐๐๐ข๐ฅ๐ข๐ญ๐ฒ ๐๐ซ ๐๐๐ฏ๐๐ง๐ฎ๐? Have you ever got payment for something before delivering services? Or have an online shopping experience? If yes, then you must have heard of advance payments. Similarly, deferred revenue is advance payments that you receive earlier before making delivery of products or services. Curious to learn about deferred …
๐๐จ๐ง๐ญ๐ซ๐ ๐๐ฌ๐ฌ๐๐ญ ๐๐ฌ ๐๐จ๐ง๐ญ๐ซ๐ ๐๐๐ฏ๐๐ง๐ฎ๐- ๐๐จ๐ฐ ๐๐จ ๐๐ก๐๐ฒ ๐๐ข๐๐๐๐ซ? Contra Asset vs Contra Revenueโฆ. If you are wondering what is the difference between a contra asset account and a contra revenue account? All your queries are going to be gone away. Just read ahead! Contra means the opposite. Aย contra accountย is an account that has an …
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.
A suspense account is used for an unidentified transaction. As soon as that it becomes identified, record them in their respective accounts.
๐๐ก๐จ๐ฎ๐ฅ๐ ๐ ๐ฎ๐ฌ๐ ๐๐๐ฌ๐ก-๐๐๐ฌ๐ข๐ฌ ๐จ๐ซ ๐๐๐๐ซ๐ฎ๐๐ฅ ๐๐๐๐จ๐ฎ๐ง๐ญ๐ข๐ง๐ ? Cash basis vs accrual basis accounting?ย Ahh! Confusing- what are they? Why and how Cash basis accounting is different from accrual basis accounting? Which is the most appropriate accounting method- cash accounting or Accrual Accounting?ย Looking for the answers to these complicated questions? Then you are at the right …
Accrual accounting is an accounting method that records revenues and expenses when they incur- same accounting period.