Adjusting Entries: Unearned Revenue definitions Flashcards
Adjusting Entries: Unearned Revenue definitions
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Unearned Revenue Liability account representing cash received before goods or services are delivered to the customer. Liability Obligation to provide goods or services in the future due to cash received in advance. Deferral Accounting adjustment delaying recognition of revenue or expense until a later period. Adjusting Entry Journal entry made at period end to update account balances for accrued or deferred items. Accrual Basis Accounting method recognizing revenue when earned and expenses when incurred, regardless of cash flow. Cash Basis Accounting method recognizing revenue and expenses only when cash is received or paid. Revenue Income earned from providing goods or services, recognized when performance obligations are met. Debit Entry on the left side of an account, increasing assets or decreasing liabilities and equity. Credit Entry on the right side of an account, increasing liabilities or equity and decreasing assets. Balance Sheet Financial statement showing a company's assets, liabilities, and equity at a specific point in time. Prepaid Hours Units of service paid for in advance, representing future obligations to the customer. Earned Revenue Portion of revenue recognized after goods or services have been delivered to the customer. Service Obligation Commitment to perform work or deliver goods in the future due to advance payment. Journal Entry Record in the accounting system documenting a business transaction's financial impact. Credit Balance Amount by which credits exceed debits in an account, typical for liabilities and equity.
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