Asked by Danielle Marie on May 01, 2024
Verified
Unearned Rent Revenue is
A) a contra account to Rent Revenue.
B) a revenue account.
C) reported as a current liability.
D) debited when rent is received in advance.
Unearned Rent Revenue
Income received from tenants for rent that has not yet been earned because the rental period has not occurred.
Current Liability
A financial obligation that is due to be settled within one year or within the normal operating cycle of the business, whichever is longer.
- Record transactions involving unearned revenue and understand its implications on financial statements.
Verified Answer
JR
Jenny RabangMay 03, 2024
Final Answer :
C
Explanation :
Unearned Rent Revenue represents rent that has been received in advance but has not yet been earned by the company. As the company has not yet provided the service, the revenue cannot be recognized and must be reported as a current liability on the balance sheet until the service is provided. Therefore, choice C is the correct answer as it accurately describes Unearned Rent Revenue.
Learning Objectives
- Record transactions involving unearned revenue and understand its implications on financial statements.