Question

In: Accounting

Unearned Fees appear on the

Unearned Fees appear on the

  • a. balance sheet in the current assets section
  • b. balance sheet as a current liability
  • c. income statement as revenue
  • d. balance sheet in the stockholders' equity section

 

Solutions

Expert Solution

The unearned fee is the revenue that is not yet earned by the company but the cash or other monetary benefit is already received for it. As the company has received the consideration for the services in advance; therefore, it is the liability of the company to perform the services. It is a current liability because it is most likely to be performed within one year of becoming due.


The correct answer is b. Balance sheet as a current liability.

 

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