What accounting entry is made when a company receives an order for its goods or services?

If money is not received with a customer's order, there will be no accounting entry when the order is received. (However, there could be an entry into the company's computer system for scheduling the work, planning for the materials to be on hand, etc.)

The reasons there is not an entry into the company's general ledger accounts (and no effect on the company's financial statements) when the order is received are 1) the company has not yet earned any revenues, and 2) the company does not yet have a right to a receivable or other asset. The revenues and a receivable are not earned until the company ships or delivers the goods or services.

The company may have a responsibility to deliver what it offered to the customer, but there is no double-entry business transaction to be recorded at the time that the order is received.

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