What is your process in adjusting the amount of advance already received against an invoice?

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Mahesh Babu, PS

  • Oct 20th, 2012
 

Amount or income already received in advance will be construed as deferred revenue and entries are as follows:

1) When receipt of advance:

Bank A/c Dr
To Unearned revenue A/c

2) Recognition of revenue earned:

Unearned revenue A/c Dr
To Revenue A/c

Finally,
3) Transfer to Profit & Loss A/c
Revenue A/c Dr
To Profit & Loss A/c

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