Customer Advances Local

Code: 2181
👁 Views: 185

Account Information

Financial Statement Statement of Financial Position
Normal Balance Credit

Definition

Amounts received in advance from local customers before service delivery or goods handover

Common Journal Entries

Receive advance from local customer

Dr. Bank Account
Cr. Customer Advances Local

Settle advance upon delivery

Dr. Customer Advances Local
Cr. Sales

Refund advance to local customer

Dr. Customer Advances Local
Cr. Bank Account

Recognize advance as revenue

Dr. Customer Advances Local
Cr. Service Revenue

Receive advance from local customer

Dr. Bank Account
Cr. Customer Advances Local

Settle advance upon delivery

Dr. Customer Advances Local
Cr. Sales

Refund advance to local customer

Dr. Customer Advances Local
Cr. Bank Account

Recognize advance as revenue

Dr. Customer Advances Local
Cr. Service Revenue

📐 IFRS vs US GAAP Accounting Treatment

IFRS IFRS 15 Revenue from Contracts with Customers
US GAAP ASC 606 Revenue from Contracts with Customers

❓ Frequently Asked Questions

Q: How is an advance from a local customer recorded?

A: Dr. Bank, Cr. Customer Advances Local (liability). When service is provided, it is transferred to revenue.