Accrued uncollected revenue refers to revenue that a company has earned in the current period but has not yet billed or collected. To ensure this revenue is recognized in the appropriate period, an adjusting entry is necessary at the end of the period.
This includes revenue earned but not yet billed, such as services rendered to customers that will be billed in a future period.
Debit: Accounts Receivable (Asset) to recognize the amount owed.
Credit: The appropriate revenue account (e.g., Service Revenue or Interest Revenue).
This entry ensures that the revenue earned is recorded in the correct accounting period, matching the company's income with the services provided, regardless of when the payment is received.
A company provides $1,500 of maintenance services in December, but the customer will be billed in January. The adjusting entry would be:
Debit: Accounts Receivable $1,500
Credit: Service Revenue $1,500