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alexdok [17]
3 years ago
12

Unearned fees appear on the a.income statement as revenue b.balance sheet in the current assets section c.balance sheet in the o

wner's equity section d.balance sheet as a current liability
Business
1 answer:
ZanzabumX [31]3 years ago
4 0

Answer:

The answer is D. balance sheet as a current liability

Explanation:

Unearned fee is the amount that has been collected before rendering a service. For example, a customer paid in advance for goods that have been delivered, a football season ticket holder. The full service has not been rendered. So it is recognized as a liability because the customer can terminate the contract anytime.

As the service is being rendered, maybe monthly, quarterly or weekly, revenue is recognized and unearned fee decreases.

For example, a customer paid a $12,000 on Jan 1. for monthly delivery of magazine for a year. Here, the customer paid for a service that last till Dec 31st.

What will be recognized as revenue monthly is $1,000($12,000/12months) and unearned revenue too decrease by $1,000 monthly

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