Recognition of revenues with deposits


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Let's say i run a catering service. Someone has given me X amount of money as a deposit and the full amount will be paid on the day of the event which won't happen until my next accounting cycle. My assumption is that all the amount are exempt from recording it as a revenue even with the deposit. Also, the amount won't show up in my income statement. Am i correct?
 

Triest123

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Let's say i run a catering service. Someone has given me X amount of money as a deposit and the full amount will be paid on the day of the event which won't happen until my next accounting cycle. My assumption is that all the amount are exempt from recording it as a revenue even with the deposit. Also, the amount won't show up in my income statement. Am i correct?
=> Yes. Revenue is recognised only when the service is rendered.
 
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Yes in case of services, revenue is recorded when services are rendered.
If the accounting period end before completion of the event then it will become part of balance sheet under "Advance from customers".
 

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