Unearned revenue is typical for Microsoft due to the nature of their products, such asWindows and Office. At the time of sale, customers pay for the current version of the software as well as future upgrades that will become available. Microsoft recognizes revenue for the sale of the current version, and records unearned revenue for the value of future upgrades.
Unearned Revenue is a Liability Account
credit to unearned revenue
Unearned Revenue is a liability account.
Initial receipt of unearned revenue from a customer for service to be provided in the future. Recognition of the unearned revenue as the service is performed and earned. Adjustment entry to reflect the portion of unearned revenue that has now been earned.
Unearned Service Revenue is a Liability account.
[Debit] Cash / bank [Credit] Unearned revenue
Industries that have unearned revenue are nonprofit agencies like UNICEF. Another industry that has unearned revenue is the Internal Revenue Service of the United States.
[Debit] Unearned revenue [Credit] Sales 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.
Unearned Service Revenue is a Liability account.
Unearned revenue converted to earned revenue after it is done and delivered to customer.
Unearned revenue account is classified as current liability as it is the revenue not yet earned by business.