Unearned Revenue is reported on the balance sheet as a liability.

Question

Quizplus · Accepted Answer

Unearned revenue represents payment received in advance for goods or services that have not yet been provided or earned. As such, it is considered a liability as the company has an obligation to provide the goods or services in the future. Therefore, it is reported on the balance sheet as a liability until the revenue is earned and recognized as income on the income statement.

Unearned Revenue Is Reported on the Balance Sheet as a Liability