Service Revenue Journal Entry / Fees Earned or Fees Received Journal Entry

Service Revenue Definition And Meaning

When companies provide services to customers for a specified fees, then Service Revenue Account is created. For Services companies which provide services to customers, it is a main source of Revenue for these kinds of companies / corporations.

When it is earned by the company for Cash, then the Journal Entry would be as follows:

                                                          Cash a/c  XXX

                                                                        Service Revenue Received a/c  XXX

                                                (Service Revenue Received From Customers)

When it is earned on account, then in that case, the journal entry would be as follows:

                                      Accounts Receivable a/c  XXX

                                                                            Service Revenue Received a/c  XXX

                                                      (Service Revenue Earned On Account)

But after the company delivered services to customers within the time frame if the customers did not pay on due date then they are liable to pay fees to company after due date. In that case, it becomes Accrued Revenue, which is a Current Asset and shown on the Balance Sheet. The entry would be as shown below:

Service Revenue Adjusting Entry

                         Accrued Service Revenue a/c  XXX

                                                                        Service Revenue Received a/c  XXX

                                                     (Service Revenue Earned On Account)

When the company actually receives the payment on the next month, then the above Adjusting Entry is reversed by passing following Reversing Entry as shown below:

                        Service Revenue Received a/c  XXX

                                                                         Accrued Service Revenue a/c  XXX

                                              (To Close Service Revenue Receivable Account)

For cash received from customers, following entry is recorded:

                                                Cash a/c  XXX

                                                             Account Receivable a/c  XXX

                                 (Cash Received From Customer For The Services Delivered)

Service Revenue Account is a revenue account, which is a temporary account, and it is shown on Income Statement. When service revenue is earned, we credit it and when it is closed to Income Statement, we debit it.

Service Revenue Examples

Examples of Services Revenue Account are Fees Earned or Received, Tuition Fess Received / Earned, Commission Received, Rent Received, etc.