Meaning that Fees Earned

Fees deserve signifies the revenue an entity that is generally involved in rendering solutions to its clients generates during the report period. As soon as an entity deals in both goods and also services it charges fees for the component of solutions rendered and also for the goods yielded it fees the predetermined price. That generally forms a significant part the revenue in the business industry.

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Few Instances inside an entity document the quantity earned as fees:

For services Rendered –

ConsultancyConsultancy top top Taxation related MattersAuditing and AssuranceArchitectural ServicesAccountancy and also Other legit Services.


Both Goods and also Services-

Manufacturing and repairsTrading in goods and consultancyGoods and also transport


When a combined amount is got for the cases wherein both goods and services space rendered one has to record fees earn proportionately.

Whether the shall be credited or Debited?

Fees earn shall it is in credited as fees form a component of the revenue and also as per modern rule that accounting, the increase in an income should be “Credited”.

Even if you follow the golden rule of accounting there will be no adjust in the price this is because as per golden rule around a nominal account debit the expenses and losses and also credit all incomes and gains.

Accounting treatment

If an entity complies with Cash system of audit entire amount obtained shall kind part the the fees earned. One need not distinguish fees based upon actual earnings in the accountancy period.

Journal Entry for the exact same shall be:

Bank A/cDebitDebit the rise in an asset.
To Fees deserve A/cCreditCredit the increase in income.

The audit treatment in an revenue statement is offered below-


If an entity adheres to Accrual system of accountancy only that part of the receipts shall form a part of fees deserve which has actually been accrued in the report period.

The amount if received in advance shall be taped as a liability and also if received less then such a distinction shall be taped as sundry debtors under current assets.

Journal Entry because that the very same shall be:

Out of the complete revenue, a component of fees is received in advance-

Bank A/cDebitDebit the rise in one asset.
To breakthrough Fees A/cCreditCredit the rise in liability.
To Fees earned A/cCreditCredit the increase in income.

It shows up in the revenue statement and also balance sheet together –



In situation if only component of fees earn is got in a report period:

Bank A/cDebitDebit the rise in an asset.
Sundry Debtors A/cDebitDebit the boost in an asset.
To Fees earn A/cCreditCredit the boost in income.

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It appears in the income statement and also balance sheet as –



As it have the right to be seen in all of the cases above that fees earned gift an earnings is credited.