00:01
So we're trying to figure out where unearned revenue goes in the financial statements.
00:05
So the options are either in the income statement or the balance sheet as a liability or an asset or equity, but the question specifically asks if it's an asset or a liability.
00:31
Or the cash flow statement could be part of it, but the question is asking really these two options.
00:37
So revenue goes in the income statement or sales it could be listed as that's part of the income statement.
00:48
But unearned revenue is different.
00:50
It's like when you accept cash for something that you haven't done the work for.
00:56
So, for example, it could be an airline that sells you a ticket, but then the event of the plane ride has not happened yet.
01:08
And so they haven't earned their revenue even though they've gotten the money.
01:12
So a journal entry for that, they would receive cash...