A supplier posts revenue for goods or services directly to the revenue account. If the performance obligation related to recognizing that value is not satisfied, that revenue is deferred. When the performance obligation is satisfied, revenue is recognized. If invoicing has not taken place and the performance obligation is satisfied, revenue is recognized against the Revenue Accrued account. When invoicing takes place, the revenue accrual is reversed.

Revenue recognition postings are split into the following types:

Deferral postings are intended to move the revenue from the sales account to the deferred revenue account. Deferral postings are created when the revenue for an order on a performance obligation cannot be recognized because the rule on the performance obligation is not satisfied.

Recognition postings recognize revenue. Sometimes, these postings recognize revenue that has previously been deferred to a deferred revenue account. The recognition posting moves the revenue back to the sales revenue account. In other cases, revenue can be immediately recognized but the customer has not yet been invoiced, so revenue is recognized to an accrued revenue account.