Accounting and Finance for Lawyers
Deferred Revenue
Revenue for services not yet rendered cannot be entered be entered as Revenue when it is paid. Instead, a Deferred Revenue liability account must be increased. When the service is rendered, this account is then decreased and the Revenue account is increased.
Example
Account | Debit | Credit |
Cash | 1000 | |
Deferred Revenue | 1000 | |
Deferred Revenue | 1000 | |
Revenue | 1000 |