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unearned rental revenue is a contra account

Given this information, Rent Revenue for the current year must be: a. Is Unearned Revenue a Contra Account? What is Unearned Revenue? $8,888. 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'. d. $1,333. b. a revenue account. 2. 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. At the beginning of the year, the Unearned Rent account has a balance of $30,000. In other words, its expected balance is contrary to—or opposite of—the usual credit balance in a revenue account. Collecting unearned revenue from your customers is also a task on its own. 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. $24,000 . 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. This is advantageous from a cash flow perspective for the seller, who now has the cash to perform the required services. Credit 'Unearned Rental Revenue' $ 4,800. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is A. $30,000 . b. 1. 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. 11. Lv 4. c. reported as a current liability. C. $54,000. b. d. $ 6,000 . Specialized cloud-based accounting and invoicing software such as Fresh-Books is needed to provide a trusted and long-lasting solution. A contra revenue account is a revenue account that is expected to have a debit balance (instead of the usual credit balance). d. debited when rent is received in advance. D) debited when rent is received in advance. B. 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. $90,000. C) reported as a current liability. Unearned revenue is not a contra revenues account. Unearned rent, or deferred revenue as it may be called, is an account for landlords only, not tenants. Unearned revenue is money received from a customer for work that has not yet been performed. 2 0. scharer. Collection of Unearned Revenue. $36,000. B) a revenue account. 3. The Unearned Rent account balance at the end of the year is $6,000. The entry is: Debit 'Unearned Rental Revenue' $ 800. Credit 'Rental Revenue' $ 800. c. $4,000. The interest charged on a $200,000 note payable, at the rate of 8%, on a 90-day note would be a. The unearned rent account has a balance of $72,000. Unearned Rent Revenue is A) a contra account to Rent Revenue. D. $18,000 The problem is that Inventory items can't be pointed at an unearned revenue liability account (like a service or non-inventory item). 10. 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). Tenants' balance sheets will often have a prepaid rent asset account, and rarely an unearned rent liability account. c. $12,000 . Unearned Rent Revenue is a. a contra account to Rent Revenue. $16,000. Debit 'Unearned Rental Revenue ' $ 800 in advance information, Rent Revenue flow perspective for the seller who. 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