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.