Unearned Service Revenue On Balance Sheet

In the case of subscription revenue you have a liability to provide the publication membership rights or other items or services to which your customer has subscribed.

Unearned service revenue on balance sheet. It is recorded on a company s balance sheet as a liability. The amount earned through the delivery of the product or service represents earned income which the company reports on the income statement. Discuss how unearned revenues are reported on the balance sheet. Hence the business creates the liability in its balance sheet till goods or services are delivered or performed.

Unearned revenue is money received by an individual or company for a service or product that has yet to be provided or delivered. Usually this unearned revenue on the balance sheet is reported under current liabilities. Unearned revenue can be thought of as a prepayment for goods or services that a person or company is expected to produce for the purchaser at some later date or time. It s categorized as a current liability on a business s balance sheet a common financial statement in accounting.

It s considered a liability or an amount a business owes. Unearned revenue is money received by a or company for a service or product that has yet to be fulfilled. Unearned revenue is a liability on the balance sheet. Unearned revenue can also be interpreted as revenue received in advance from customers but the performance of service or delivery of goods would be done later on.

The remaining balance of unearned revenue appears on the balance sheet.