Unearned Revenue Is Recorded as an Asset Until the Revenue

question 63

True/False

Unearned revenue is recorded as an asset until the revenue has been earned.

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Definitions:

Additional Paid-in Capital

The amount of equity capital that is invested in a company by shareholders over and above the par value of the shares.

Professional Corporation

A type of corporation typically formed by lawyers, doctors, and other professionals, where the company acts under corporate status but allows its members to maintain professional liability.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholder equity at a specific point in time.

Current Liabilities

Debts or obligations that are due to be paid within one year or within the normal operating cycle of the business, whichever is longer.