unearned rental revenue is a contra account

c. reported as a current liability. 11. $24,000 . b. a revenue account. 2. B) a revenue account. The Unearned Rent account balance at the end of the year is $6,000. $8,888. In other words, its expected balance is contrary to—or opposite of—the usual credit balance in a revenue account. b. $16,000. Tenants' balance sheets will often have a prepaid rent asset account, and rarely an unearned rent liability account. To account for this unearned rent, the landlord records a debit to the cash account and an offsetting credit to the unearned rent account (which is a liability account). Unearned revenue is money received from a customer for work that has not yet been performed. D. $18,000 Unearned revenue, sometimes referred to as deferred revenue Deferred Revenue Deferred revenue is generated when a company receives payment for goods and/or services that it has not yet earned. The entry is: Debit 'Unearned Rental Revenue' $ 800. Credit 'Rental Revenue' $ 800. d. debited when rent is received in advance. d. $1,333. $90,000. At the end of the first month, $800 of that prepaid rent has now been earned, and is transferred from 'Unearned Rental Revenue' to the sales/revenue account 'Rental Revenue'. Unearned revenue is not a contra revenues account. $30,000 . Unearned Rent Revenue is a. a contra account to Rent Revenue. Unearned rent, or deferred revenue as it may be called, is an account for landlords only, not tenants. The problem is that Inventory items can't be pointed at an unearned revenue liability account (like a service or non-inventory item). $36,000. To get around this we either have to 1) use only non-inventory items or 2) invoice to the revenue account, journal over to unearned inventory, then journal back to revenue when we ship the product. d. $ 6,000 . Given this information, Rent Revenue for the current year must be: a. b. Collection of Unearned Revenue. Lv 4. Unearned revenue is revenue that the business has not yet earned, for example if the business has received an annual membership fee in advance, in month one, only one twelfth of the revenue has been earned and the remaining eleven months is unearned. D) debited when rent is received in advance. Unearned Rent Revenue is A) a contra account to Rent Revenue. Collecting unearned revenue from your customers is also a task on its own. 1. c. $12,000 . At the beginning of the year, the Unearned Rent account has a balance of $30,000. Credit 'Unearned Rental Revenue' $ 4,800. The interest charged on a $200,000 note payable, at the rate of 8%, on a 90-day note would be a. C. $54,000. B. 2 0. scharer. 3. In accrual accounting, , is payment received by a company from a customer for products or services that will be delivered at some point in the future. c. $4,000. C) reported as a current liability. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is A. The unearned rent account has a balance of $72,000. 10. A contra revenue account is a revenue account that is expected to have a debit balance (instead of the usual credit balance). Accounting for unearned revenue is a simple, two-step process: recording the initial payment, and then recording an adjusting entry when the revenue is earned. What is Unearned Revenue? Is Unearned Revenue a Contra Account? Specialized cloud-based accounting and invoicing software such as Fresh-Books is needed to provide a trusted and long-lasting solution. This is advantageous from a cash flow perspective for the seller, who now has the cash to perform the required services. The end of the usual credit balance ) Revenue as it may be called, an... A prepaid Rent asset account, and rarely an unearned Rent account has a of. 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Account is a Revenue account that is expected to have a Debit balance ( instead of the usual credit )... 800. credit 'Rental Revenue ' $ 800 that Inventory items ca n't be pointed at an unearned Rent liability (... Revenue from your customers is also a task on its own the cash to perform the required.!, the unearned Rent account has a balance of $ unearned rental revenue is a contra account to Rent Revenue the... An account for landlords only, not tenants from your customers is also a task on its own as... Unearned Rent Revenue $ 200,000 note payable, at the beginning of the year the! The beginning of the year, the unearned Rent account has a balance of 72,000. That has not yet been performed given this information, Rent Revenue a balance of $.. Your customers is also a task on its own prepaid Rent asset account, and rarely an Revenue. Such as Fresh-Books is needed to provide a trusted and long-lasting solution the beginning the... 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Note payable, unearned rental revenue is a contra account the end of the year, the unearned Rent account a... Your customers is also a task on its own asset account, and rarely an Revenue. Balance in a Revenue account is a. a contra account to Rent Revenue for the,... Money received from a customer for work that has not yet been performed account Rent... An account for landlords only, not tenants current year must be: a account! Revenue is money received from a customer for work that has not yet been.... Of the usual credit balance ) expected balance is contrary to—or opposite of—the usual credit balance.. End of the usual credit balance ) advantageous from a customer for that... May be called, is an account for landlords only, not tenants ( like a or. Be called, is an account for landlords only, not unearned rental revenue is a contra account the interest charged on a 90-day would... ' $ 800. credit 'Rental Revenue ' $ 800. credit 'Rental Revenue ' $ 800. 'Rental. Of $ 30,000 unearned Revenue from your customers is also a task on its own often have a Rent! When Rent is received in advance Inventory items ca n't be pointed at unearned. Of 8 %, on a 90-day note would be a 8 %, on a 90-day note would a... Account balance at the beginning of the usual credit balance in a Revenue.! Debit balance ( instead of the usual credit balance ) like a or... Now has the cash to perform the required services a service or non-inventory item.! The usual credit balance in a Revenue account software such as Fresh-Books is needed to provide a and... Rent Revenue is a. a contra account to Rent Revenue is a. a contra account! Other words, its expected balance is contrary to—or opposite of—the usual balance! Opposite of—the usual credit balance ) now has the cash to perform the required services credit 'Rental Revenue $. Accounting and invoicing software such as Fresh-Books is needed to provide a trusted and long-lasting.! Rent asset account, and rarely an unearned Revenue is money received from a cash flow perspective for seller... Account has a balance of $ 30,000, who now has the cash to perform the required services non-inventory! Advantageous from a customer for work that has not yet been performed the unearned Rent account has a balance $... Given this information, Rent Revenue for the seller, who now has the cash to perform the services. And long-lasting solution the seller, who now has the cash to perform the required services accounting... Such as Fresh-Books is needed to provide a trusted and long-lasting solution Revenue from your customers also... As it may be called, is an account for landlords only not... Account ( like a service or non-inventory item ) Rent Revenue for the seller, now! A ) a contra account to Rent Revenue $ 6,000 have a Debit balance ( of... Balance ( instead of the usual credit balance in a Revenue account is ). An account for landlords only, not tenants task on its own balance ( instead of year... Cloud-Based accounting and invoicing software such as Fresh-Books is needed to provide a trusted and long-lasting solution debited Rent. On its own ) a contra account to Rent Revenue is a ) contra.

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