What Kind of Revenue Will You Earn?

What kind of revenue will you earn ?

Unearned service revenue. Because it’ s just lunch collect cash up front for a package of dates. This business collect cash from costumers in advance of performing work. Receiving cash before earning it creates a liability to perform work in the future. It’s just lunch owes a service to the customer, or it owes the customer his/ her money back. Only after completing the job will the business earn the revenue.

Unearned revenue is the same thing as deferred revenue. In accounting, unearned revenue is a liability. It is a liability because even though it’s just lunch has received payment from the customer, the money is potentially refundable and thus not yet recognized as revenue.

It’s just lunch cannot recognize the revenue until it provides the service to the customer who paid for it. The line item "Unearned Revenue" or "Deferred revenue" gives the business a place to recognize that the cash payment has come in but the business has deferred the revenue recognition until a later date.

when will you record it as revenue?

When the transaction occurs, adjusting entries must be made in the general journal as the business earns the revenue or provides the service. it’s just lunch, the journal entry includes a debit to cash and a credit to unearned revenue. The income statement, or statement of earnings, does not reflect that the company has made a sale until it has earned the income by delivering the service to the customer. Yet, the balance sheet, or statement of financial position, would show that the company increased its cash asset at the same time it incurred a liability for the transaction, as it still has to deliver the service to the customer. However, after the services are provided, they should adjust the entries and report them as earned revenue.