Questions
- What is deferred revenue?
- What is accounts receivable?
- The Trial Balance report shows deferred revenue and accounts receivable. Can you explain what these are?
Solution
In ROLLER's accounting reports (using the accrual method), key entries include deferred revenue and accounts receivable.
| Term | Definition | Example |
|---|---|---|
| Deferred revenue | Deferred revenue refers to the amount paid on a booking that contains tickets which are yet to be redeemed or expire. When tickets are redeemed at POS or expire due to non-attendance, deferred revenue is recognized as revenue. |
When a group reserves a wildlife park tour and pays an upfront deposit, this payment is initially recorded as deferred revenue. It remains in this state until the group either attends the booking or the expiry date is reached. At that point, the deferred revenue is recognized as actual revenue in ROLLER and the park's accounting records. |
| Accounts receivable | In ROLLER, accounts receivable are outstanding balances on bookings that have already occurred (redeemed at POS or expired). | A group participated in a tour but has not yet settled the outstanding amount for their booking. This outstanding amount is recorded as accounts receivable in ROLLER until it is paid. |