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Performed $702 of services for customers who paid in advance in August?
For October transactions : Performed $702 of services for customers who paid in advance in August. I know one account is service revenue and that would be credited. What is the other account that would be credited because I thought it was Cash and it is not.
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When the customers prepaid in August you would have debited Cash and credited some liability account, frequently called "Unearned Revenue" or something similar.
In October, having done the work, you've earned the revenue (and so the credit to Service Revenue, as you've noted), and you've now satisfied the liability. So the debit would go to.. |
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