What is meant by unearned revenue ? How can you treat it in Accounting ?

Dear ,

 

Unearned income or unearned revenue occurs when a company receives money before the money is earned. This is also referred to as deferred revenues or customer deposits.

We can record this to liability accounts like Unearned Revenues, Deferred Revenues, or Customer Deposits.

 

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Best Regards .

 

SHAMEEM 

Unearned revenue is a liability for the recipient of the payment, so the initial entry is a debit to the cash account and a credit to the unearned revenue account.

Unearned revenue treatment in accounting : As a company earns the revenue, it reduces the balance in the unearned revenue account (with a debit) and increases the balance in the revenue account (with a credit). The unearned revenue account is usually classified as a current liability on the balance sheet

simple sir, advance collection but not treat income till due in accounts it is advance from customer. this basic concept that " income recorded when due (no matter collected or not), expenses recorded when occurred ( no matter paid or not)" 

Well, this is a simple question. By unearned revenue we means the advance payment for a service or goods which we didn't deliver yet. If this service or goods which we didn't provide yet last till the end of accounting period then we will put this amount on the liabilities side of balance sheet as a liability.

Unearned Revenue is a liability by Nature. In a very simple explanation, when we collect Cash in Advance against any service or goods but the sales transaction is not recorded till the end of Financial Period, so we need to treat as Unearned income / Revenue (Liability side of BS). Its a vise versa of Prepaid payment when we paid in Advance so we treat as an Asset. Thanks

Unearned is stands with liabilities. This situation happen when business gets consideration before performing its part. In other words collect money without performing services or delivering goods.

Unearned revenue is a liability for the recipient of the payment, so the initial entry is a debit to the cash account and a credit to the unearned revenue account.

unearned revenue is money you received for a service or goods you didn't deliver yet , and it's treated as liablilites .

 we should use continual improvement baseline in our products and services

Unerarned revenue is the amount of money received against the goods or services but the goods or services not provided or rendered yet. It will be the liability of a business. 

Unearned Revenues are treated as obligation/liability. It represents a cash received in advance for services to be rendered or products to be delivered in the future.