Deferred revenue


Assistant Accountant

I have read that deferred revenue is the advance that we have received.

e.g. if we have recd advance in the month of March for the goods that we are going to deliver in June isn't it called deferred revenue ?

so its our liability?

please advise

 
Reply   
 

yes advance that is received against future sale of goods is our current liability.it shud be deferred and shall be recognized as Income to revenue month on month
 
Reply   
 

Yes deferred revenue is a liability
At the time of receiving a advance, we record the entry
Bank A/c Dr. xxx
To Def.Revenue xxx

When the product or services is delivered over time, it is recognised as revenue in income statement
Def.Revenue Dr. xxx
To Sale xxx
 
Reply   
 
Assistant Accountant

Thanks a lot

Deferred Revenue (current liability) is the advance recd for the services to be rendered in future

Deferred/Prepaid Expense (current asset) is the advance payment for the expenses to be incurred in future

But then if we read deferred revenue expenditure it's the expense which has been covered in an accounting period. Is it different than the first two concepts?

 
Reply   
 

yes you are right
 
Reply   
 
Assistant Accountant

thank you

 
Reply   
 

like Advertisement Exp.is a deferred revenue expenditure it will be amortised over the period
 
Reply   
 
Assistant Accountant

ok.all these concepts comes under M.com syllabus? i am asking as i havn't persuade post graduations.

 
Reply   
 

LEAVE A REPLY

Your are not logged in . Please login to post replies

Click here to Login / Register  

 


×

  CCI MENU