Is Unearned Revenue A Permanent Account

Unearned Revenue Or Outstanding Revenue Is A Permanent Or A Temporary Account

Unearned Revenue is a Current Liability which is a Balance Sheet Account, so it is a Permanent Account.

Unearned revenue is not a temporary account. When the company earns revenue for the period, then the company removes the unearned revenue account from the Books of Accounts and records the revenue which is actually now earned by the company. So, now, this revenue is a temporary account.

For example, if a company received fee in advance from its client but the services are not rendered to him, then unearned revenue is recorded in the balance sheet of the business as still the company is liable to render its services to its client against the fee received in advance.

So, we can say that unearned revenue is a permanent account and when the business earned the revenue, then such revenue becomes a temporary account