How should Unearned Rent Revenue be classified on a balance sheet at December 31,2013? The rental contract covers the period,January 1,2013 through December 31,2015.
A) current liability only
B) long-term liability only
C) current and long-term liability
D) current asset only

Question

Quizplus · Accepted Answer

Since the rental contract period extends beyond the current year, a portion of the revenue earned will apply to future periods, making it a long-term liability. However, a portion of the revenue will also apply to the current period, making it a current liability. Therefore, Unearned Rent Revenue should be classified as both a current and a long-term liability on the balance sheet.

How Should Unearned Rent Revenue Be Classified on a Balance