How to report revenue as deferred revenue as a liability on the balance sheet

Hi walter-weppler-w,

Thanks for reaching out in the Community. I'd be happy to assist with reporting deferred revenue on your balance sheet.

To report revenue as deferred revenue on the balance sheet in QuickBooks Online, follow these steps:

• Create a Liability Account for Deferred Revenue:
  1. Sign in to QBO as the primary admin.
  2. Click the Gear icon ⚙ at the top right corner and select Chart of Accounts.
  3. Click New to create a new account.
  4. Choose “Other Current Liability” as the account type.
  5. Name the account “Deferred Revenue” or a similar descriptive name.
  6. Click Save & Close.
   
• Record Deferred Revenue Transactions:
  1. When you receive prepayments from customers, record them as deferred revenue. This means the money is not yet considered earned income because the goods or services for which it was paid have not been provided.
  2. Create an invoice for the prepayment and select the deferred revenue liability account as the income account.
  When the customer pays the invoice, it debits your bank account and credits accounts receivable (A/R).
  3. The deferred revenue account will still have a credit balance, which represents the unearned income.

I also recommend consulting an accountant for best way to handle deferred revenue. You can visit our site to find an accountant near you: Find a ProAdvisor.

If you have any other questions, feel free to reach out.