Leaning Online

Firstly, we must know about What is Deferred Revenue, then we can easily pass the Deferred Revenue Journal Entry. Deferred Revenue Definition Deferred is related to future period, so Deferred Revenue means that we received payment for the goods sold but still we do not delivered or rendered our services to customers. We will render our services or deliver goods to customers in future period of time. It is a Currant Liability  u nder Deferred Liabilities   for the Selling Company and Current Asset  u nder Deferred Assets for the Customers with in the Current Accounting Period. Example: When the Company A receives the payment from the customer for goods Rs. 6000, then it is a Deferred Revenue or Unearned Revenue or Revenue Received in Advance for the Company and it is a Current Liability as well. From the point of view of Customer, It is a Current Asset because the benefits for the goods still not received by him / her. Deferred Revenue Recognitio

We already discussed about Adjustments In Accounting in our previous article, but here we particularly concerned about Prepaid Rent Journal Entry. Business needs property and building for carrying out the business activities. So, they either build their own buildings to establish their head office or they get the building on rent. Here, we consider that the company which doing the business of Real Estate and gives offices on rent and charges monthly rent for giving the offices. The Real Estate company also receives the amount of rent in advance from the company getting the office on rent. This rent is Prepaid rent for the company getting the office on rent and Outstanding Rent for the Real Estates company. From the point of view business, it is a  Current Asset for the Company getting office on Rent because the company will receive the benefits in future period of time and Current Liability for the Real Estate Company because the company is liable to provide rent faciliti

Current Liabilities are debts due that are payable by the business to outsiders within the current Accounting Period. Examples are Accounts Payable / Creditors, Trades Payable, Notes Payable, Outstanding Expenses, Unearned Revenues and any other Current Expenses Payable in the Current Accounting Period.     Current Liability is a present obligation a nd certain amount that is payable in the current specified period of time.           You may also be interested in  International Accounting Standards IAS-1 Contingent Liability       It depends upon the happening of a uncertain future event that may or may not happen. It is possible obligations that depends upon future uncertain events that are uncertain and these events may happen or not. Due to such uncertain future event, then this liability will arise and the amount is determined from the past events.     In case of Contingent Liabilities, The Notes T

What is Current Liabilities To Net Worth Ratio This ratio shows the relationship between amounts due to the Accounts Payable and Equity of the business within the Current Accounting Period.aricle In words, we can say that Current Liabilities Divided By Net Worth Multiplied By 100. Mathematically, we can write the Formula of this ratio as:   Current Liabilities / Net Worth x 100     This ratio shows in Percentage (%) measurement.       Here Net Worth is calculated according to Accounting Equation and it is the Difference Between Total Assets - Total Current Liabilities within the Current Accounting Period.        You may also be interested in Types of Financial Ratios And Their Formulas Importance of Current Liabilities To Net Worth Ratio   1. The entrepreneur s use the resources provided by the Accounts Payable (Creditors) and Owners of the Business to finance various business projects.