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How to Calculate Unearned Revenue

By Motley Fool Staff – Updated Apr 29, 2025 at 10:57PM

Key Points

  • Revenue is income from a business's normal activities, like a landscaper's service fees.
  • Unearned revenue is prepaid by customers and is a liability until services are rendered.
  • Recording unearned revenue involves debiting cash and crediting a liability account.
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