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Unearned fee and unearned revenue is that amount which is received from client in advance but actual services are not provided yet to client.
The revenue for which the services have been rendered but the return for the services i.e revenue, is yet to be received from the person to whom we have rendered the services is called unearned service revenue.
When payment received without services: Debit Cash / bank Credit Unearned revenue When services rendered: Debit Unearned Revenue Credit Services revenue
The journal entry for prepaid income is a debit to the Cash account and a credit to the Unearned Revenue account. The Unearned Revenue account is a liability. The rationale for such an entry is that this is income received in advance. This means that the income has not been earned since the services have not yet been performed. When the services have been performed it is appropriate to recognize the revenue and offset the liability account, unearned revenue.
Earned Revenue = The revenue benefits of which have been provided to customers Unearned Revenue = The amount of which is already received but the corresponding benefits or services have not yet been provided. Example: Amount received to provide repair services next month. So when next month services will be provided that unearned revenue become earned revenue.
Unearned fee and unearned revenue is that amount which is received from client in advance but actual services are not provided yet to client.
The revenue for which the services have been rendered but the return for the services i.e revenue, is yet to be received from the person to whom we have rendered the services is called unearned service revenue.
When payment received without services: Debit Cash / bank Credit Unearned revenue When services rendered: Debit Unearned Revenue Credit Services revenue
The journal entry for prepaid income is a debit to the Cash account and a credit to the Unearned Revenue account. The Unearned Revenue account is a liability. The rationale for such an entry is that this is income received in advance. This means that the income has not been earned since the services have not yet been performed. When the services have been performed it is appropriate to recognize the revenue and offset the liability account, unearned revenue.
Prepaid is that amount of expense which is paid in advance and expense not occured while unearned account is that amount where amount for services received in advance but services not provided.
Earned Revenue = The revenue benefits of which have been provided to customers Unearned Revenue = The amount of which is already received but the corresponding benefits or services have not yet been provided. Example: Amount received to provide repair services next month. So when next month services will be provided that unearned revenue become earned revenue.
Unearned revenue is the amount which client has paid already but not received the services yet so it is the liability of the company until they renderred the services to client or otherwise return back the amount to the client.
Because it is revenue received but services or goods have not been provided to the customer yet.
Unearned revenue is liability for business as amount is received but services are not provided that's why it is liability until it is earned and shown in balance sheet.
Unearned revenue accounts represent the amount of cash received before services are provided. Since services have not been provided yet, it is not revenue. (It represents the obligation for future services in order for the revenue to be earned.)
debit unearned incomecredit services liability
Revenue