Where Does Service Revenue Go On Balance Sheet

Effect of revenue on the balance sheet.

Where does service revenue go on balance sheet. Even though an intangible asset such as apple s logo carries huge name recognition value it does not. Generally when a corporation earns revenue there is an increase in current assets cash or accounts receivable and an increase in the retained earnings component of stockholders equity. 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. Service revenue and interest expense are income statement items not balance sheet items unless they are accrued interest which is a current liability and accrued interest which is a current expense.

If the payment terms allow credit to customers then revenue creates a corresponding amount of accounts receivable on the balance sheet. Internally developed intangible assets do not appear as such on a company s balance sheet. I am doing accounting homework but i am at lost as to where to put the service revenue and expenses on the classified balance sheet. Prepayments are expenses paid in advance and the unexpired up is accounted as current assets in the balance sheet.

The chart of accounts for a business includes balance sheet accounts that track what the company owns its assets. A service is provided to the customer and the service revenue is taken to the income statement. Any help would be great. 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.

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. The balance sheet accounts and the financial report they make up are so called because they have to balance out. Thank you in advance. It goes on the income statement under revenues.

Service revenue will appear on the income statement as a revenue account. It will indirectly effect the balance sheet in that it will be accompanied by an increase in either cash accounts. The two types of asset accounts are current assets and long term assets. Service revenue does not go on the balance sheet.

Vice versa revenues received in advance are payment received from customers for work not yet done or goods to be delivered at some future date. The value of the.