Recognize Revenue in Advance of Billing With Pass Thru

The following scenario recognizes $15,000 in revenue, $5,000 of which is pass thru, before billing $15,000.

GL Transactions AC Transactions
Accounts Receivable
Debit Credit
15,000(2)
Unbilled/Earned Unbilled/Earned (c)
Debit Credit Debit Credit
10,000(1) 10,000(2) 10,000(1) 10,000(2)
Revenue Revenue (p)
Debit Credit Debit Credit
15,000(1) 15,000(1)
Pass Thru Pass Thru (c)
Debit Credit Debit Credit
5,000(1) 5,000(2) 5,000(1) 5,000(2)

Transaction 1 (1)

This entry recognizes revenue of $15,000 ($5,000 is pass thru, $10,000 is billable). Because revenue is recognized in advance of billing, the unbilled/earned account is debited. Also, you may credit a different account with the share of revenue that is pass thru.

Transaction 2 (2)

This entry bills $15,000. The unbilled/earned and pass thru balances are cleared and Accounts Receivable is debited.