Chapter 3& 4
Revenue
Cash is received at
the same time as
goods delivered/
services rendered
Cash Debit
Revenue Credit
Revenue is
recognized first
DEFERRAL
Cash is received
BEFORE goods
delivered/ services
rendered
Accounts rec Debit
Cash Debit
ACCRUAL
Revenue Credit
SETTLEMENT OF
ACCRUAL
When Cash is collected
in the future
Unearned
Revenue Credit
ADJUSTMENT OF
DEFERRAL
Cash debit
When services are
rendered in the future
Accounts rec Credit
Unearned revenue debit
Revenue Credit
Unearned revenue is A LIABILITY
Chapter 3& 4
Expenses
Cash is paid at the
same time as
expenses incurred
Expenses Debit
Cash Credit
ACCRUAL
DEFERRAL
expenses are incurred
first
Cash is paid BEFORE
expenses are incurred
Expenses Debit
Expense payable
Credit
SETTLEMENT OF
ACCRUAL
When Cash is paid in
the future
Expense payable debit
Cash Credit
Prepaid Expenses
Debit
Cash Credit
ADJUSTMENT OF
DEFERRAL
When expenses are
incurred
Expenses debit
Prepaid expenses Credit
Expense payable is a liability
Prepaid expense is an asset