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Would unearned revenue be included in operating activities of the statement of cash flows? why or...

Would unearned revenue be included in operating activities of the statement of cash flows? why or why not?

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Answer #1

Uneraned Revenue is the advance received from the customer for which services or goods will be provided in the future.

Unearned Revenue appears as a liability and mostly as a part of Current Liabilities.

Hence, any change in current liabilities from one period to another is included in the statement of cash flows.

Under Indirect method of preparing Cash Flow Statement - Increase in Unearned Revenues will increase the cash from Operating activities while a Decrease in Unearned Revenues will decrease the cash from Operating activities.

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