Unearned fees appear on the
A) balance sheet in the current assets section
B) balance sheet as a current liability
C) balance sheet in the owner's equity section
D) income statement as revenue

Question

Quizplus · Accepted Answer

Unearned fees are payments received in advance for services that have not yet been provided. As such, they represent a liability to the company until the services have been rendered. They should be recorded on the balance sheet as a current liability. Options A, C, and D are incorrect because unearned fees are not yet earned and should not be reflected as revenue or in the equity section.

Unearned Fees Appear on the