Unearned Revenue Is Reported on the Balance Sheet as a Liability

question 109

True/False

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.

---

Definitions:

Unity-of-command Principle

A management principle stating that each employee should receive orders from only one superior to avoid confusion and conflict.

Organisation Structures

The hierarchical arrangement of lines of authority, communications, rights, and duties within a company that determines how roles, power, and responsibilities are assigned, controlled, and coordinated.

Decision-making Authority

The power or right delegated to an individual or group to make choices that will affect outcomes within an organization.

Centralised

A structural approach in organisations where decision-making authority is concentrated at the top levels of management.