Unearned revenues should be classified as Other Revenues on the statement of earnings.

Question

Quizplus · Accepted Answer

Unearned revenues are a liability since they represent funds received for goods or services not yet provided. They should not be classified as revenues until the goods or services are actually provided. Once the goods or services are provided, the liability is converted to revenue and it is then classified as such on the statement of earnings.

Unearned Revenues Should Be Classified as Other Revenues on the Statement