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Marrrta [24]
3 years ago
11

Unearned revenue is reported on the balance sheet as a liability and represents amounts paid to an entity in exchange for future

services and/or goods. True or False
Business
1 answer:
BartSMP [9]3 years ago
6 0

Answer:

True

Explanation:

Unearned revenue is cash received from a customer before goods are delivered or services offered. It is an amount received for work that is not yet done. Unearned revenue is a liability to the business. It may also be called deferred revenue.

As per the accruals principle, revenue is recognized when the time when an economic activity that generates income has happened. A sale of either a service or good has to happen, or the business has to incur an expense. A payment whose work is yet to be done is not recognized as revenue. The journal entry is to debit to the cash account and credit the unearned revenue account.

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Answer:

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- Operating activities are those that include normal business operations like buying and selling of inventory, interest payments, and salaries.

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- Financing activities includes cash used to purchase or sell equity such as shares, payment of dividends, and repayment of principal from debt

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