Deferred Revenue year end impact?

The entry would be a Debit to Sales, a Credit to COGS, and the
difference, should be a credit (if you are making a profit) goes to
deferred profit in current liabilities. If you are paying commission or
have bank charges related to the sale, would be accrued liabilities and
the offset to deferred profit.



Hope this helps.



Tim Macy



________________________________

From: vantage@yahoogroups.com [mailto:vantage@yahoogroups.com] On Behalf
Of Dan Shallbetter
Sent: Friday, January 13, 2006 6:06 AM
To: vantage@yahoogroups.com
Subject: [Vantage] Deferred Revenue year end impact?




We do not see advance billing very often and have a very basic
understanding of accounting. If we advance bill a customer and create a
deferred revenue account (contra-liability?) I think we make the Wip
adjustment at time of delivery. What is the year-end impact on the
income statement & balance sheet? assuming delivery after fiscal year
end. My guess is reduced taxable net income, and no bottom line impact
on balance sheet other than shareholders equity adjustment to reflect
the deferred revenue. Please be gentle it's early and the coffee hasn't
kicked in!

Thanks

Dan Shallbetter
States Electric Mfg.


[Non-text portions of this message have been removed]



________________________________



[Non-text portions of this message have been removed]
We do not see advance billing very often and have a very basic
understanding of accounting. If we advance bill a customer and create a
deferred revenue account (contra-liability?) I think we make the Wip
adjustment at time of delivery. What is the year-end impact on the
income statement & balance sheet? assuming delivery after fiscal year
end. My guess is reduced taxable net income, and no bottom line impact
on balance sheet other than shareholders equity adjustment to reflect
the deferred revenue. Please be gentle it's early and the coffee hasn't
kicked in!

Thanks

Dan Shallbetter
States Electric Mfg.


[Non-text portions of this message have been removed]
There is no impact on the income statement. We classify the deferred
income as a current asset. Upon shipment (packing slip), the revenue
will post in the new year.

-----Original Message-----
From: vantage@yahoogroups.com [mailto:vantage@yahoogroups.com] On Behalf
Of Dan Shallbetter
Sent: Friday, January 13, 2006 8:06 AM
To: vantage@yahoogroups.com
Subject: [Vantage] Deferred Revenue year end impact?


We do not see advance billing very often and have a very basic
understanding of accounting. If we advance bill a customer and create a
deferred revenue account (contra-liability?) I think we make the Wip
adjustment at time of delivery. What is the year-end impact on the
income statement & balance sheet? assuming delivery after fiscal year
end. My guess is reduced taxable net income, and no bottom line impact
on balance sheet other than shareholders equity adjustment to reflect
the deferred revenue. Please be gentle it's early and the coffee hasn't
kicked in!

Thanks

Dan Shallbetter
States Electric Mfg.


[Non-text portions of this message have been removed]



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