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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.