Unearned Revenue Definition Xero accounting
Even if you don’t have any deferred revenue on your books, consider whether any of the income your business is earning now is paying for something you owe customers in the future. That means you would make the following journal entry on January 31st, to decrease the deferred revenue liability by $200 and increase membership revenue by $200. If your business uses the cash basis of accounting, you don’t have to worry about deferred revenue. According to cash basis accounting, you “earn” sales revenue the moment you get a cash payment, end of story. If the service is eventually delivered…