Classify the following items as (1) prepaid expense, (2) unearned revenue, (3) accrued revenue, or (4) accrued
Question:
Classify the following items as (1) prepaid expense, (2) unearned revenue, (3) accrued revenue, or (4) accrued expense.
a. Cash received for services not yet rendered
b. Insurance paid for the next year
c. Rent revenue earned but not received
d. Salaries owed but not yet paid
Step by Step Answer:
a Unearned revenue b Prepaid expense c Accrued revenue d Accrued expense Explanation 1 Unearned reve...View the full answer
Corporate Financial Accounting
ISBN: 978-1133952411
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
Related Video
Unearned revenue is money received by an individual or company for a service or product that has yet to be provided or delivered. It can be thought of as a \"prepayment\" for goods or services that a person or company is expected to supply to the purchaser at a later date. As a result of this prepayment, the seller has a liability equal to the revenue earned until the good or service is delivered. This liability is noted under current liabilities, as it is expected to be settled within a year.
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