Unearned revenue is prepaid by customers and is a liability until services are rendered. Recording unearned revenue involves debiting cash and crediting a liability account. Investor Alert ...

The cash receipt form should be used to deposit the funds into unearned revenue, liability accounts 150200–150299. Upon providing the goods/services, a journal entry should be completed to reduce ...

At that point, it can remove the liability from the balance sheet and record the unearned revenue as revenue on its income statement. Source: Getty Images. If a company sells a good or service ...