Need some confirmation on this:
Prepaid expenses / Unearned revenue: You have paid but not received (asset), or you have been paid but you have not given or provided (liability)
Accrued revenue / expenses: Revenue not collected, or expenses not paid.
The thing is that the two first (PE-UR) show up on the balance sheet as themselves, but the others do not, right? Accounts receivable would be an Accrued revenue, but it does not appear with that specific name, whereas PE-UR do, I think.
Thanks in advance.
Unearned Revenue will appear on the balance sheet as a _ liability _: Unearned Revenue or Customer Deposits or something similar.
Prepaid Expenses will appear on the balance sheet as an _ asset _: Prepaid Rent or Prepaid Insurance or Prepaid Expenses or something similar.
Accrued Revenue will appear on the balance sheet as an _ asset _: Accounts Receivable or something similar.
Accrued Expenses will appear on the balance sheet as a _ liability _: Accounts Payable or Wages Payable or Interest Payable or something similar.
Prepaid expenses- Is that you have expensed prior but you haven’t recieved the benifits related with that so it is your asset till you haven’t recieved benifits.Example- sunk costs
Unearned revenue- Revenue or any kind of payment that you have recieved earlier of providing services related with that so that is your liability till you are not providing the services.Example- subscription amounts
Accrued revenue- Revenue that you haven’t recieved but service provided, hence it is our collections in the form of recievables. It is the part of Asset side.Example- credit sales.
Accrued expenses- The expenses related to the period have’nt been paid by company in that period to which expenses is related.It is the part of Liability side.Examples- Salary and wages.