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- Advances to and from accounting can be recorded as follows12:
- If an advance is made by a customer, it is initially recorded by the recipient as a liability.
- If the advance is made to a supplier, the payer records it as an asset.
- When a company receives money in advance of earning it, the accounting entry is a debit to the asset Cash for the amount received and a credit to the liability account such as Customer Advances or Unearned Revenues.
- If the advances will be earned within one year, they should be listed as a current liability.
Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.If an advance is made by a customer, it is initially recorded by the recipient as a liability, since no performance has yet been completed. If the advance is made to a supplier, the payer records it as an asset, since no related receipt and consumption has occurred.www.accountingtools.com/articles/advanceIf they will be earned within one year, they should be listed as a current liability. When a company receives money in advance of earning it, the accounting entry is a debit to the asset Cash for the amount received and a credit to the liability account such as Customer Advances or Unearned Revenues.www.accountingcoach.com/blog/reporting-revenue … - People also ask
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