Is unearned revenue a temporary account?
Understand the Problem
The question is asking whether unearned revenue is classified as a temporary account in accounting. This involves understanding the nature of unearned revenue and how it is treated in financial statements.
Answer
Unearned Revenue is not a temporary account
The final answer is Unearned Revenue is not a temporary account
Answer for screen readers
The final answer is Unearned Revenue is not a temporary account
More Information
Unearned revenue is considered a liability because it represents an obligation to deliver goods or services in the future, hence it is a real account and not closed at the end of the period.
Tips
Common mistakes include confusing unearned revenue with temporary revenue accounts or failing to recognize it as a liability.
Sources
- Unearned Revenue. Unearned revenue is money received for work that hasn't been performed - homework.study.com
- Unearned Revenue: What It Is, How It Is Recorded and Reported - investopedia.com
- Temporary vs Permanent Accounts | F&A Glossary - BlackLine - blackline.com
Thank you for voting!
