What is meant by unearned revenue, Accounting Basics

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What is meant by unearned revenue

Response to the following questions:

1. On December 31, Marchant Company took a physical count of its merchandise inventory. It operates under the perpetual inventory system. The physical count amounted to $185,294. The Merchandise Inventory account shows a balance of $187,936. Journalize the adjusting entry.

2. Explain what is meant by unearned revenue. Why it is treated as a liability?

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Accounting Basics: What is meant by unearned revenue

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Accounting Basics: What is meant by unearned revenue

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