Which of the following describes the classification and normal balance the Unearned Rent Revenue account?
Unearned Rent Revenue is classified as a liability account on the balance sheet. It normally has a credit balance.
The unearned revenue account is used to track revenue for which payment has been received, but the work has not yet been performed. It is considered a liability because it requires the company to invest future time and resources to fully earn the cash that has acquired. Once the work is completed this account can be closed out to regular revenue.
- Student: Nicole G
- Textbook: Accounting Principles I
- Course: ACC/290