[jira08]

Hi
If the company has performed service to a customer and has not yet receive cash, we should record this as Dr. Accounts receivable or Accrual Revenue?

Thannks
Tan

[accteacher]

Hi
If the company has performed service to a customer and has not yet receive cash, we should record this as Dr. Accounts receivable or Accrual Revenue?

Thannks
Tan

If the service was sold on credit then the person is a debtor? So you would dr the debtor account and cr sales

[accteacher]

I think the entry would be DR Debtor Account
Cr Sales Account

[cfa_aspirant]

Once the Goods/Service is delivered, by accounting principles, revenue can be recognized in the Income Statement. But what if the customer has not been billed, can the transaction be treated as Accounts Receivable in the Balance Sheet? I would expect not. Instead an asset 'Accrued Revenue' will be created in the Bal Sheet. Once the customer is billed the amount will become 'Accounts Receivble'

[morgaine300]

First, you might want to notice how old this thread is.

Second, doing the actual billing process has nothing to do with whether something is actually a receivable. If the service has been performed (as implied by the original question), then it is a receivable. Putting a piece of paper in the mail does not determine whether something is a receivable or not.

It's already accrued revenue because it's been earned. The original question should not have been an "or." It's both a receivable and it's accrued revenue because it's been accrued and not paid.

[suratc]

In my opinion, the condition used to classified between account receivable and accrued income is the document company issuing.
In some circumstances, the revenue recognition occurs, but the time to issuing billing documents does not meet (Usually in revenue from contract such as construction contract, long-term service lender contract with specified billing process.) This event make the company have to record income but not be able to issuing invoice or billing.
In overall both are viewed as receivable. Just the claim of both is different.