Q1TI_5 - Horngren'S Financial And Managerial Accounting

Question

For each account listed, identify the category in which it would appear on a classified balance sheet.

5. Unearned Revenue

Step-by-Step Solution

Answer

Unearned Revenue are classified as current liabilities.  

Step-by-Step-Solution

Step 1: Explanation on Current Liabilities

Current liabilities are the obligations of the entity which are paid or cleared within a year or within a operating cycle.  

Step 2: Explanation on Unearned Revenue

Unearned revenue refers to the advance income received by the business, in which services or goods will be provided in future. As the goods or service will be provided in future, hence it is treated as current liabilities.