Q:

Is unearned revenue an asset?

A:

Quick Answer

Unearned revenue is not an asset, according to Investopedia. Unearned revenue is actually a liability to the company that has the account on its books, because it represents payments already made for a promised good or service.

Continue Reading

Full Answer

The liability carried due to unearned revenue is carried on the accounts as long as the agreed upon good or service remains undelivered, according to Investopedia. Unearned revenue is a temporary account on the balance sheet, as it is created once the pre-payment for the good and service is received but then cleared out and closed as soon as the good or service is presented to the buyer.

Learn more about Taxes
Sources:

Related Questions

  • Q:

    How do you estimate capital gains taxes on real estate?

    A:

    To estimate capital gains on the sale of real estate, calculate the difference between the purchase price and sale price of the asset, notes About.com. In addition, determine the holding period of the property.

    Full Answer >
    Filed Under:
  • Q:

    How do you estimate capital gains tax?

    A:

    To estimate capital gains, subtract the basis from the selling price of a capital asset, then apply the appropriate capital gains tax rate, explains the Houston Chronicle. Capital gains tax rates change annually, and current rates are available on the official website of the Internal Revenue Service.

    Full Answer >
    Filed Under:
  • Q:

    What is capital gains tax?

    A:

    A capital gains tax is the tax levied when an investor sells a capital asset for more than the original purchase price. While the asset is held by the investor, no tax is charged as it only applies when the asset is sold.

    Full Answer >
    Filed Under:
  • Q:

    What are the resale rules for the capital gains tax?

    A:

    Capital gains taxes are applied to any asset defined as a capital asset such as a home, furnishings, stocks or bonds, according to the Internal Revenue Service. A tax is levied on the difference if the sale amount is higher than thepurchase price.

    Full Answer >
    Filed Under:

Explore