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Unearned revenue is classified as : 1- Asset 2- Liability

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Question added by Khaled Abdelrehim ACCA DipIFR CMA , Financial Analysis Assistant General Manager , Khalda Petroleum Company
Date Posted: 2014/07/15
khalid Hassanien
by khalid Hassanien , Financial Manger , Alrwania Ltd

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.

Ankit Jain
by Ankit Jain , Finance Controller (head of Finance and Accounts) , Imperio International Limited, Lagos, Nigeria

It is simply Current Liability, which is undue but received. when it becomes due, it becomes income, but uptill then it is a liability.

Nancy Refai
by Nancy Refai , Health, safety and environmental management Trainer and consultant , Freelancer

It's liability as long as the company is obliged to deliver service/ product in return to prepaid money

Muhammad Anas Jangda
by Muhammad Anas Jangda , Deputy Manager Internal Audit and Systm , Soorty Enterprise Limited (Denim Manufacturer and Exporter)

it as liablity as received amout has not been earned therefore income cant be credited remaining one is liablity which has to be credited with debited asset.

Faraz Shafiuddin Shafiuddin
by Faraz Shafiuddin Shafiuddin , Business Analyst , National Guard Health

2 - Liability

Akram Massoud
by Akram Massoud , FINANCE MANAGER , Autoexcellence LTD

The unearned revenue account is usually classified as a current liability on the balance sheet.

MUDDASSER ALI
by MUDDASSER ALI , Manager Accounts , M/s Ghulam Muhammad & Sons (GMS (Pvt) Ltd). (Autoparts Manufacturing Concern)

Current Liablity till we dont give goods/services,after delivery it becomes income

Aatif Khan
by Aatif Khan , Manager Compliance & Reconciliation , Kings Real Estate

As unearned revenue appears as a credit entry and cannot be classified as a revenue, it will automatically be classifed as a liability

Khaled Mohee Eldeen Abbas Mahmoud
by Khaled Mohee Eldeen Abbas Mahmoud , Chartered Accountant # 10465 , Self-employed

unearned revenu is a liability

serbah djamel
by serbah djamel , Senior Specialist General ledger/ Financial control , wataniya telecom algeria

A deferred revenue is a product that relates to year N +1 but was recorded in N.

Incidence documents summaries 

 

For the Balance Sheet

The Deferred appear at the bottom of the liability. 

 

To the income statement 

The deferred revenue decrease account balances usual products. 

 

For Annex 

Accruals must be information in the annex, if it is significant.

khaled Ibrahim Sayed Abd El Salam Ibrahim
by khaled Ibrahim Sayed Abd El Salam Ibrahim , Chief Accountant , -ElMehy engineering company

I agree with Mr.Mohamed Iqabl100 % and i think its the best defin for it and the best use as well, finally i wish if we can agree with some one its the best to say that instead of asnwer without know the accurate answer.

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