Corporatefinanceinstitute com 1 The Corporate Finance Institute Accounting For more eBooks please visit

1.
Accrued expenses
2.
Accrued revenues
3.
Deferred expenses
4.
Deferred revenues

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corporatefinanceinstitute.com
18
The Corporate Finance Institute
Accounting
Deferred 
Revenue
Accrued Revenue
When cash is received prior to 
earning revenue by delivering goods 
or services, the company
records a journal entry to recognize 
unearned revenue.
When revenues are earned but 
not yet recorded at the end of the 
accounting period because cash 
changes hands after the service is 
performed or goods delivered.
•
Gift cards 
•
Airline miles 
•
Subscriptions to newspaper and
magazines
•
A customer acquired goods
and agreed to pay the
following month
•
A company earned interest
revenue from the bank on its
checking account and had not
yet recorded it
XYZ Company delivered services in 
September for an $800 payment 
that was made three months ago.
DR Unearned Revenue: 800
CR Sales Revenue: 800
XYZ Company delivered services 
on the last day of the month and 
sent an invoice for $4,400.
DR Accounts Receivable: 4,400
CR Sales Revenue: 4,400
Definition
Situational examples
Adjustment Journal Entry
Deferred and accrued revenue

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corporatefinanceinstitute.com
19
The Corporate Finance Institute
Accounting
Deferred Expense
Accrued Expense
Amounts paid for in advance of 
using assets that benefit more than 
one period
The process of recognizing 
expenses before the cash is paid