Is Unearned Revenue a Liability Account

Deferred revenue is a liability related to a revenue producing activity for which revenue has not yet been recognized. This is why unearned revenue is recorded as an equal decrease in unearned revenue a liability account and increase in revenue an asset account.

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Description of the transaction or nature of business giving rise to deferred revenue or unearned revenue other than annual membership fees.

. This makes sure the equation continues to balance. Generally an entity records deferred revenue when it receives consideration from a. FreshBooks has online accounting software for small businesses that makes it easy to generate balance sheets and view your unearned revenue.

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