Unearned revenues are:? -

Revenues that were received by the customer, but not yet earned. revenues are recognized when they are (1) realized or realizable, and are (2) earned (usually when goods are transferred or services rendered), no matter when cash is received An example of this would be paying $40.00 on a $30.00 phone bill. The $30.00 dollars would be booked as earned revenue and the extra $10.00 would be booked as unearned revenue. Over the next month as you used your phone service, the company would have earned the extra payment. Only once the phone company provided you with the services and billed you could they then claim the money as earned revenue. In many industries, it is normal for the customer to pay before receiving the product or service. Therefore, there is a need to distinguish between earned and unearned revenue.