Unearned revenue is prepaid revenue.
THE CUSTOMER pays in advance for services that have not yet
been performed by the COMPANY
Is it Asset or Liability?
Unearned revenue is a liability
Examples of Unearned Revenue
On January 1, 2008, ALTD Company purchased a general liability insurance policy for $3,600
to provide coverage for the calendar year.
1. If the company recorded the policy as an asset when purchased,
What is a trial balance and explain its purposes?
A trial balance is a list of accounts and their balances at a given
time. Its primary purpose is to prove the equality of debits and
credits after posting. A trial balance also uncovers errors in
Transactions for John Smith Company for the month of October are
presented below. Journalize each transaction. You may omit journal