What is the entry for earned & unearned revenue collected in advance?

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nnavigator

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Hi - would really appreciate it if someone could double check if my reasoning is correct. Thank you!
Recording the earned portion of revenue collected in advance - I have no idea what this means…would it be:
DR Unearned Revenue
CR Revenue
Is it essentially an adjusting entry for unearned revenue?
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Recording the unearned portion of revenue collected in advance
(1) Shock: Recording unearned portion of revenue
DR Cash
CR Unearned Revenue
(2) Shock: Revenue is earned (adjusting entry)
DR Unearned Revenue
CR Revenue
 
If you collected money in advance then you haven’t yet earned the revenue. The term “earned portion of revenue collected in advance” does not make sense.
 
krokodilizm wrote:
If you collected money in advance then you haven’t yet earned the revenue. The term “earned portion of revenue collected in advance” does not make sense.
Click to expand...
That’s exactly what I was confused about! Now that I think about it, it might be a red herring. Who knows ……
 
I think what you mean is that initially there were advances received, in which case you made this entry
DR Cash
CR Unearned/deferred revenue (balance sheet)
and then when you start invoicing (earning it) you do
DR Unearned revenue
CR Revenue
to slowly eat away the balance sheet entry
 
krokodilizm wrote:
I think what you mean is that initially there were advances received, in which case you made this entry
DR Cash
CR Unearned/deferred revenue (balance sheet)
and then when you start invoicing (earning it) you do
DR Unearned revenue
CR Revenue
to slowly eat away the balance sheet entry
Click to expand...
Thank you for the clarification :)
 
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