PDA

View Full Version : Post closing balance sheet


golfsforme
Jun 5, 2008, 12:20 PM
Do you close unearned revenue to the income summary?

morgaine300
Jun 5, 2008, 08:49 PM
No. You close revenues, expenses and drawing/dividends. Unearned revenues isn't earned, and therefore isn't revenue. It's a liability. Someone has paid the company in advance for something and they now have an obligation to do whatever work they do. Liabilities don't close.