Collected cash not recorded as revenue


2 Answer(s)


Usually it goes into the Deferred Revenue balance on the Balance Sheet under Liabilities. Over time, as the services are performed, the Deferred Revenue balance “turns into” real revenue on the Income Statement.


A company collects cash from the customer apart from revenue in the following cases:
1. A cash loan is forwarded to the company
2. Advance for a sale is made to the company (revenue is recorded as an advance not as sale)
3. When a donation or funds are offered by the govt or others for specific purposes
4. When there is a cash purchase return by the company