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There is no way to increase Revenue and Liabilities in a single transaction. Another reason for this is the accounting equation.
Assets = Liabilities + Owners Equity
In double entry accounting there must be a debit and a credit that equals. You want to "increase" liabilities and revenue with a single entry, this cannot be done because and increase in liabilities relies on a credit entry as does an increase in revenue.
Assets maintain a Debit Balance, meaning they increase with a debit.
Liabilities maintain a Credit Balance, meaning the increase with a credit.
Owners Equity maintains a Credit Balance, increasing with credit.
Revenue is an OWNERS EQUITY ACCOUNT and therefore increases with a credit.
Say you desired to increase Liabilities $500 and Revenue $500 in a single entry, you couldn't because you'd need to "credit" liabilities $500 and "credit" revenue $500, but you MUST have a "debit" that equals the same amount of credits.
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What will a decrease a revenue and a increase liability?
I can think of nothing that will do that in one transaction. Revenue generally does not effect your liabilities. Revenue is an Owners Equity account and most transactions in revenue effect that, not liabilities. (there is one exception and it is explained later on.)Expenses decrease revenue, which in turn decreases retained earnings which effects owners equity.Dividends Paid decrease retained earnings, which in turns also effects owners equity.The only time any "revenue" has an effect on liabilities is if it is an "unearned" revenue. An unearned revenue is a liability, however, it "increases" your liabilities and increases your assets at the same time. Once the unearned revenue is "earned" it then increases your "revenue" and you decrease your liability.
What is the journal entry for prepaid income?
The journal entry for prepaid income is a debit to the Cash account and a credit to the Unearned Revenue account. The Unearned Revenue account is a liability. The rationale for such an entry is that this is income received in advance. This means that the income has not been earned since the services have not yet been performed. When the services have been performed it is appropriate to recognize the revenue and offset the liability account, unearned revenue.
Is service revenue an asset or liability?
Services revenue is revenue same as product revenue and it is not an asset or liability of the business.
What is the journal entry for selling 450000 in product sales and accrued 6 percent for warranty liability?
debit accounts receivable 450000credit sales revenue 450000debit warranty liability expenses 27000credit liability payable 27000
What is journal entry for contingent liability?
the Journal entry for the above isRelated Expinditure DrContigent liability CR
