Examples of Accounting Entries for Invoicing Rules

These examples illustrate how the In Advance and In Arrears invoicing rules recognize receivables.

In Advance Accounting Entries

This example shows how you can use the In Advance invoicing rule to recognize your receivable immediately.

You receive an invoice payment for $3,000. The invoicing rule is In Advance, and the revenue scheduling rule is 3-month fixed duration. Over the course of three months, your accounting entries are as follows:

January

Account	Debit	Credit
Receivables	$3,000	None
Unearned Revenue	None	$3,000
Unearned Revenue	$1,000	None
Revenue	None	$1,000

February

Account	Debit	Credit
Unearned Revenue	$1,000	None
Revenue	None	$1,000

March

Account	Debit	Credit
Unearned Revenue	$1,000	None
Revenue	None	$1,000

In Arrears Accounting Entries

This example shows how you can use the In Arrears invoicing rule to record your receivable at the end of the revenue recognition schedule.

You receive an invoice payment for $3,000. The invoicing rule is In Arrears, and the revenue scheduling rule is 3-month fixed duration. Over the course of three months, your accounting entries are as follows:

January

Account	Debit	Credit
Unbilled Receivables	$1,000	None
Revenue	None	$1,000

February

Account	Debit	Credit
Unbilled Receivables	$1,000	None
Revenue	None	$1,000

March

Account	Debit	Credit
Unbilled Receivables	$1,000	None
Revenue	None	$1,000
Receivables	$3,000	None
Unbilled Receivables	None	$3,000