INCOME and REVENUE PART 1

Sales revenue is recognised when

• goods are delivered to customers

• goods are ordered by customers

Service fee revenue is recognised when the

• service/ job is done

• cash is received

I received cash but the service has NOT been completed.

• Income EARNED

• Income NOT EARNED

I have done the service BUT cash has NOT been received yet.

• Income EARNED

• Income NOT EARNED

I have EARNED the income BUT CASH NOT RECEIVED.

• income RECEIVABLE

• income RECEIVED IN ADVANCE

I RECEIVED the CASH BUT the service NOT DONE yet.

• income RECEIVABLE

• income RECEIVED IN ADVANCE

cash RECEIVED - income received in advance = income EARNED

• True

• False

cash RECEIVED + income RECEIVABLE = income EARNED

• True

• False

income RECEIVABLE =

• current ASSET

• current LIABILITY

income RECEIVED IN ADVANCE =

• current ASSET

• current LIABILITY