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Because it is revenue received but services or goods have not been provided to the customer yet.
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
Unearned revenue is a liability and is included on the credit side of the balance sheet. Unearned revenues are recognized when customers pay up front for the products/services. As a result, the company has an obligation to the customer to deliver products/render services. When the company has deliverd the products/rendered the services, the liability unearned revenues is reduces and recognized as sales.
Because it is revenue received but services or goods have not been provided to the customer yet.
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
Debit customer depositsCredit unearned revenue
Unearned revenue is a liability and is included on the credit side of the balance sheet. Unearned revenues are recognized when customers pay up front for the products/services. As a result, the company has an obligation to the customer to deliver products/render services. When the company has deliverd the products/rendered the services, the liability unearned revenues is reduces and recognized as sales.
What types of industries have unearned revenue? Why is unearned revenue considered a liability? When is the unearned revenue recognized in the financial statements Is a church a company that could have 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.
Customer deposits should be shown on the balance sheets as a current liability. This is because the deposits represent an obligation or liability to the company to fulfill the customer's orders or requests. It does not meet the criteria to be recorded as unearned income, which typically refers to amounts received in advance of the company providing goods or services.
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.