Unearned income is a concept of the matching principle of accrual-based accounting. Unlike a cash-based system that records cash received in advance as revenue, the accrual-based system treats advance received as an unearned income that is a liability.
Assume you run a automobile workshop for repairing services. A client visits you and asks for fixing his car after a road accident. He pays you the whole amount of repairing services in advance. This amount will not be treated as income until you have performed the services on the car. It will take the car about 10 days to be completely fixed. Until then it should be recorded as unearned income that is a liability.
Lauren is 17 years old. She reports earned income of $
a. Explain the difference between income splitting and income shifting.
The summary financial statements of KwikMart Ltd. on December 31,
Does the tax on unearned income of minor children, or “
Explain the purpose of the provision in the tax law that taxes
Nikkie and Jean have two children, Richard (age 4)
Explain the two different ways that the tax on unearned income of
In 2018, Simon, age 12, has interest income of
Repurchase agreements are listed as both assets and liabilities in Table 12
The summary financial statements of Langford Landscaping Ltd. on December 31
