Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 17 - No. 2)
What is the journal entry to record the earning of revenue when the cash was received in advance?
Debit Cash, Credit Revenue.
Debit Unearned Revenue, Credit Revenue.
Debit Revenue, Credit Unearned Revenue.
Debit Cash, Credit Unearned Revenue.
Explanation
As the service is performed or good is provided, unearned revenue becomes earned, and this is recognized by debiting the unearned revenue account and crediting the revenue account.
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