What type of account is the unearned revenue account?

liability
Unearned revenue is recorded on a company’s balance sheet as a liability. It is treated as a liability because the revenue has still not been earned and represents products or services owed to a customer.

What are the contra revenue accounts?

The contra revenue accounts commonly used in small-business accounting include sales returns, sales allowance and sale discounts. A contra revenue account carries a debit balance and reduces the total amount of a company’s revenue.

What is the entry for unearned revenue?

Unearned revenue is a liability for the recipient of the payment, so the initial entry is a debit to the cash account and a credit to the unearned revenue account.

What type of account is unearned revenue quizlet?

What type of account is the unearned revenue account? Unearned revenue is a liabilities account.

What type of account is revenue?

The revenue account is an equity account with a credit balance. This means that a credit in the revenue T-account increases the account balance. As shown in the expanded accounting equation, revenues increase equity.

What are examples of contra accounts?

Key examples of contra asset accounts include allowance for doubtful accounts and accumulated depreciation. Allowance for doubtful accounts reduce accounts receivable, while accumulated deprecation is used to reduce the value of a fixed asset.

Which of the following is contra account?

An account with a balance that is the opposite of the normal balance. For example, Accumulated Depreciation is a contra asset account, because its credit balance is contra to the debit balance for an asset account. Another example is the owner’s drawing account. However, the drawing account has a debit balance.

Is unearned revenue journal entry?

Unearned revenue should be entered into your journal as a credit to the unearned revenue account, and a debit to the cash account. This journal entry illustrates that the business has received cash for a service, but it has been earned on credit, a prepayment for future goods or services rendered.

How is unearned revenue different from revenue earned?

Difference Between Revenues and Unearned Revenues Earned revenue is the revenue received or accrued for the services provided or products delivered during a financial year. Unearned revenues represent the cash proceeds from the clients for which the services will be provided in the future.

Is Deferred revenue an asset or liability?

Deferred revenue is a liability because it reflects revenue that has not been earned and represents products or services that are owed to a customer.

What account is prepaid expense?

A prepaid expense is a type of asset on the balance sheet that results from a business making advanced payments for goods or services to be received in the future. Prepaid expenses are initially recorded as assets, but their value is expensed over time onto the income statement.

Which of the following is not a revenue?

Government grants are those which are not a revenue receipt since they are only operated in grating the financial resources to the people in order to uplift them while others deal as a receiver of some amount of money with the normal business operations.

Is unearned revenue a current liability or contra asset?

Unearned revenue is listed on the business’s balance sheet as a current liability, not a contra asset. Contra assets are asset accounts that have a credit balance rather than the normal debit balance.

What are some examples of unearned revenue?

Examples of unearned revenue are: Unearned revenue is a liability for the recipient of the payment, so the initial entry is a debit to the cash account and a credit to the unearned revenue account.

How do you account for unearned revenue on balance sheet?

Accounting for Unearned Revenue. As a company earns the revenue, it reduces the balance in the unearned revenue account (with a debit) and increases the balance in the revenue account (with a credit). The unearned revenue account is usually classified as a current liability on the balance sheet.

What is the difference between revenue account and contra revenue account?

As an revenue account is normally a credit balance, a contra revenue account will normally be a debit balance.