Received And Deposited Tuition Journal Entry

Journal Entry For Tuition Fess Received / Earned And Deposited Into Bank

Here, we will study about, ” Received Tuition Fees, which is an example of Service Revenue Account, by Educational Institutions i.e., Schools, Colleges, Universities, Academies, etc., From Students And Then Deposited Tuition Fees Into The Bank Accounts Of these Educational Institutions” .

Tuition Fees Received On Account / On Credit

At the start of the accounting period i.e., on 1^st September, 2020, when the educational institution started to provide educational services to students on account of Rs. 50000 and the students did not pay the tuition fees, then a Fees Receivable or Accounts Receivable account is created for school or education institution, as still the payment has not been received from students and it is a Current Asset for school institution. So, from the point view of school, following entry is recorded:

(i)

(Assuming Accrual Basis of Accounting System)

                      Tuition Fees Receivable a/c / Accounts Receivable a/c  50000

 

                                                                                                             Tuition Fees Received a/c 50000

 

                                                                         (Tuition Fees Receivable Recorded)

Received Tuition Fees Journal Entry 

The journal entry to record for tuition fees received Under Accrual Basis of Accounting And Cash Basis of Accounting System

When the school institution actually received the tuition fees revenue against the services provided such as providing education facilities to students i.e., delivering lecturers by teachers to students, Preparing lesson plans, growing their skills, preparing them for taking exams, etc., and such receipt of tuition fees may be in cash from students against the educational facilities provided to them during the period i.e., for semester, then following entry is recorded on 10^th March, 2021 by school institution in its Books of Accounts as shown below:

(ii)

(Assuming Accrual Basis of Accounting System)

                                                   Cash a/c 50000

 

                                                                    Tuition Fees Receivable a/c / Accounts Receivable a/c  50000

 

                                                           (Cash Received From Students)

If we add above two entries i.e., (i) and (ii), then we get the same entry as in case of Cash Basis of Accounting System as shown below:

(iii)

                                                                Cash a/c  50000

 

                                                                                  Tuition Fees Received a/c  50000

 

If educational institution adopts Cash Basis of Accounting System, then we record entry only when cash is received or paid. So, the entry to record for tuition fees received is shown below:

                                                                         Cash a/c  50000

                                                                                         Tuition Fees Earned a/c  50000

                                                                        (Tuition Fees Received)

Deposited Tuition Fees Journal Entry

So, the school institution received tuition fees for cash as a direct revenue against the educational facilities rendered to students and when the school deposited the cash amount of tuition fees to its bank account, then the Contra Entry is recorded and in such transaction, both sides involve cash and bank account i.e., on one side, cash account is coming to school’s bank account (Cash at Bank / Bank Account) and on the other side, the cash is going from school’s institution (Cash in Hand).

The contra entry to record for the deposit of tuition fees received into the bank account of school (from the point view of school) is shown below:

(Under Both Accounting Systems, the contra entry will be the same)

(iv)

                                                                        Bank a/c  50000

                                                                                          Cash a/c  50000

 

                                                                (Cash Deposited into Bank Account)

 

The net result of above two entries (iii and iv) is shown below:

(Under Accrual Basis of Accounting System)

                                                                     Bank a/c  50000

                                                        Tuition Fees Received a/c 50000ads2

Note: Under Both Accounting Methods, the final results will be the same but the accrual basis of accounting system provides more reliable, clear and realistic information than cash basis of accounting system.

So, these are the journal entries recorded for tuition fees received and then deposited it into the bank account of educational institutions (from the points view of educational institutions).

Tuition Fees Earned Is Debit Or Credit?

The normal or positive or favorable balance of tuition fees earned is credit and negative, unfavorable or unusual balance is credit. So, it creases on credit side and decreases on debit side in T-Account.

Is Tuition Fees Earned An Asset Or A Liability?

It is neither an asset nor it is a liability account. Actually, it is a Revenue Account which is a temporary account and closed to Income Summary Account at the end of the accounting period. However, when the educational institution earned tuition fees but the payment is not received against performed services, such revenue earned but the payment is not received from students' parents is called Accrued Tuition Fees, which is an example of Accrued Revenue) and it is a Current Asset and if an educational institution received the payment of tuition fees in advance but the services are not rendered to the students, then the Tuition fees received in advance, which is an example of Unearned Revenue, is called Unearned Tuition Fees and it is a Current Liability.