Unearned revenues are revenues not recorded as revenues until services are performed. revenues for services already performed and received in cash, and recorded as revenues when received. revenues for services performed but not yet received in cash or recorded. revenues for services already performed, and recorded as liabilities, before they are received.

Question

Business

Fisher Ayers

16 November, 09:10

Unearned revenues are revenues not recorded as revenues until services are performed. revenues for services already performed and received in cash, and recorded as revenues when received. revenues for services performed but not yet received in cash or recorded. revenues for services already performed, and recorded as liabilities, before they are received.

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Answers (1)

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Davenport · Answer 1

Correct option is (a)

Explanation:

Unearned revenue are revenue earned against services that have not been performed yet. In accrual system, revenue is recognized when service is performed against it.

Revenue earned without service being discharged is treated as liability till the period service is performed. It is recognized as income only after service is performed. For example unearned rent revenue is an unearned revenue which is reported as a liability till the rent period for which revenue was received is over.