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19.3
PREPAID REVENUE
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
 Prepaid Revenue: is revenue rec...
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
 Prepaid Revenue: is revenue rec...
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
NovemberOctober
Income Statement ...
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
TASK
In-class Homework
SQ1 X
SQ2 X
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19.3 - Prepaid revenue

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19.3 - Prepaid revenue

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19.3 - Prepaid revenue

  1. 1. 19.3 PREPAID REVENUE
  2. 2. © Michael Allison, Trinity Grammar School. Author’s permission required for external use  Prepaid Revenue: is revenue received but not yet earned. Example: NovemberOctober 19.3 PREPAID REVENUE Airline earns Revenue by flying customer to destination Customers pays airline $90,000 for flights Balance-Day $80,000 of the flights have been made in October $10,000 of the flights will be made in November
  3. 3. © Michael Allison, Trinity Grammar School. Author’s permission required for external use  Prepaid Revenue: is revenue received but not yet earned. Example: NovemberOctober • There is an inflow of economic benefits – the $80,000 is earned • There is an increase in Assets – the Cash account • There is an increase in Owner’s Equity • There is a present obligation – to provide $10,000 of flights • Arising from a past event– the customers paid in October • There will be an outflow of future economic benefits – the resources required to provide the flights Revenue EARNED Liability UNEARNED 19.3 PREPAID REVENUE Balance-Day
  4. 4. © Michael Allison, Trinity Grammar School. Author’s permission required for external use NovemberOctober Income Statement for October Revenue $ Airfares sales 80,000 Balance Sheet at 31 October Current Liabilities $ Prepaid airfares revenue 10,000 Revenue EARNED Liability UNEARNED 19.3 PREPAID REVENUE Balance-Day
  5. 5. © Michael Allison, Trinity Grammar School. Author’s permission required for external use TASK In-class Homework SQ1 X SQ2 X
  • DevonLawes

    May. 26, 2020

19.3 - Prepaid revenue

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