unearned income definition

unearned income

Accounting: Income received before a good is sold or a service is provided. Unearned income is classified as a current liability on the balance sheet until it is recognized as earned income during the accounting cycle.

Taxation: Income derived from means other than the provision of personal efforts, such as that derived as dividends, interest, or rent. Pensions and royalties, however, are not considered earned income.

unearned income is in the Accounting & Auditing subject.

unearned income appears in the definitions of the following terms: income tax and earned income

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