Unearned rent, representing rent for the next six months' occupancy, would be reported on the landlord's balance sheet as a(n):
A) asset.
B) liability.
C) common stock.
D) revenue.

Question

Quizplus · Accepted Answer

Unearned rent is a liability because it is rent that has been received but not yet earned. The landlord has an obligation to provide occupancy for the next six months in exchange for the rent, so it is considered a liability until it is earned.

Unearned Rent, Representing Rent for the Next Six Months' Occupancy