Service Revenue On Balance Sheet

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Service revenue on balance sheet. Balance sheet liability service revenue 100 000 income statement revenue rent expense 20 000 income statement expense unearned revenue 1 000 balance sheet liability interest expense 500 income statement expense accounts receivable 5 000 balance sheet asset equipment 45 000 balance sheet asset dividends 6 000 statement of cash flows cash. Service revenue will appear on the income statement as a revenue account. Service revenue is the income a company generates from providing a service. In january when the services have been provided the corporation will record service fee revenue of 10 000 which has the effect of increasing the.

Revenue normally appears at the top of the income statement however it also has an impact on the balance sheet if a company s payment terms are cash only then revenue also creates a corresponding amount of cash on the balance sheet. The amount is displayed at the top of an income statement and is added to the revenue from product earnings to show a company s total revenue during a specific time period. The two totals for each must balance. If the payment terms allow credit to customers then revenue creates a corresponding amount of accounts receivable on the balance sheet.

If service revenue is received before it is earned then it would go on the balance sheet as a current liability if it is expected to be earned within a year and it is called deferred service revenue. For more on the double entry system of accounting. Service revenue does not go on the balance sheet. The accounting equation for services on account the accounting equation assets liabilities owners equity means that the total assets of the business are always equal to the total liabilities of the business this is true at any time and applies.

Therefore the corporation s cash that is reported on the december 31 balance sheet includes the 10 000 and the balance sheet will also report a current liability deferred revenues of 10 000.