Discuss what do we mean by the term deferred revenue

Assignment Help Accounting Basics
Reference no: EM131798478

When a customer pays in advance for a product or service such as a prepaid insurance policy, the business that sold the item will record the cash received as an asset and the future obligation to provide the item as a liability. Please give some thought to different business situations where the customers may pay in advance and provide an example here.

1. Using your example, which account is debited to record the payment received? Which account is credited?

2. When the business provides the product or service, which account is debited? Which account is credited?

3. What do we mean by the term "deferred revenue"?

4. How would these transactions be recorded under the cash basis of accounting? What are the benefits of recording the deferral under the accrual basis?

Reference no: EM131798478

Questions Cloud

What would you suggest the university do to expand revenue : What would you suggest the university do to expand revenue? How would you tackle this problem based on what you have learned in this course?
In how many years will the future value double : What function describes the future value at the end of n years? In how many years will the future value double?
Department of commerce reported : a. Plot the consumption series. Estimate the appropriate polynomial trend model to forecast consumption expenditure for the 1st quarter of 2011.
Find the point at which the demand is of unitary elasticity : Find the point at which the demand is of unitary elasticity and find intervals in which the demand is inelastic and in which it is elastic.
Discuss what do we mean by the term deferred revenue : When the business provides the product or service, which account is debited. Which account is credited
Construct the exponentially smoothed series : 1. Construct the exponentially smoothed series for fried dough and soft drinks using a = 0.30 and a = 0.70.
What function describes the temperature t of the object : If the temperature of the object is 70°F, and C = 210°F, what function describes the temperature T of the object t hours after it is moved?
Analyze the effect of political economy on trade agreements : Analyze the effect of the political economy on trade agreements and policy. Analyze the various countries to which U.S. actively trades or has an embargo upon.
What is your opinion of jasons reasoning why : If Jason underestimates the dollar amount of ending inventory, what effect will it have on net income for the current accounting period

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd