Asked by Victoria Rodriguez on Jul 03, 2024
Verified
Unearned revenue is a liability.
Unearned Revenue
Income received by a company for goods or services that have yet to be provided to the purchaser.
- Identify the various segments and purposes behind adjusting entries in accounting, featuring accrued revenues, accrued expenses, deferred revenues, and prepaid expenses.
- Identify and illustrate the standard types of accounts subject to adjustments through adjusting entries, involving assets, liabilities, revenues, and expenses.
Verified Answer
AI
Ashley IknerJul 06, 2024
Final Answer :
True
Explanation :
Unearned revenue refers to payments received in advance for goods or services that have not yet been delivered or provided. Since the delivery or provision of the goods/services is still pending, the company has an obligation to fulfill its promise, thus making it a liability.
Learning Objectives
- Identify the various segments and purposes behind adjusting entries in accounting, featuring accrued revenues, accrued expenses, deferred revenues, and prepaid expenses.
- Identify and illustrate the standard types of accounts subject to adjustments through adjusting entries, involving assets, liabilities, revenues, and expenses.