Professional Services
Client Advance Refunded — Engagement Cancelled
Refunding an unused client advance when a project is cancelled before meaningful services are delivered.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Advance from Client (Unearned Revenue) | Liability (−) | 10,000.00 | - |
| Cash / Bank (Refund) | Asset (−) | - | 10,000.00 |
💡 Accountant's Note
If the engagement contract allows for full refund on cancellation with no work done, the entire advance is refunded. The liability is cleared. If some work was performed, revenue for services rendered is recognized first and the remainder is refunded.
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