In accounting, unearned revenue are the revenues from products and/or services that are yet to be delivered to its customers or clients. Since the business haven't delivered the products or services yet, it is classified as liability as you still owe your customers/clients something.
To know more about liabilities, just continue on reading below.Liabilities
In accounting, liabilities are the resources that a company owes to another business or people.Two types of liabilities:Current liabilities - accountabilities that must be paid or dealt within a year or operating cycle of a business.Non-current liabilities - accountabilities that must be paid but not within a year or operating cycle of a business.Examples of current liabilities:Accounts PayableNotes PayableUnearned RevenuesExamples of non-current liabilities:Mortgage PayableBonds Payable
Para yung iba na hindi pwedeng maguwi ng books or wala sa school nila ang hinahanap na books meron pa silang matatakbuhan na ibang lugar na hindi sila gagastos. Hindi lang ang mga nag aaral ang makakukuha ng benepisyo rito dahil lalagyan din ito ng mga magazines at iba pang pwede makatulong sa pamumuhay at hanapbuhay.
The correct answer among the above listed choices is letter b. Recording interest expense has an effect to decrease equity.Interest Expense
-it is the cost of borrowing money to an entity in a specified period of time. Interest is usually running every day but usually paid monthly, quarterly, semiannually, or annually depending on the agreement.
-this is recorded as a non-operating expense in the income statement.
The interest expense formula is:
Interest expense = (Days during which funds were borrowed ÷ 365 Days) x Interest rate x Principal
Interest Expense will usuallyincrease expenseeither increase liabilities or decrease assetsdecrease owners' equity
For related topic about Differentiate revenues from expenses
When the price increase the quantity of supply that the suppliers create will also increase.