Practice question · Match the pairs
Match each right-side item to its nature.
- Unearned revenue
- Retained earnings
- Deferred tax
- Share capital
- What owners invested
- Tax owed but not yet due
- Cumulative profits left inside the firm
- Cash received for services not yet delivered
Hints
- Ask whether the firm owes money, owes a service, or owes nothing.
- Cash received for an undelivered service is still an obligation.
Show the answer
- Unearned revenue → Cash received for services not yet delivered
- Retained earnings → Cumulative profits left inside the firm
- Deferred tax → Tax owed but not yet due
- Share capital → What owners invested
Why
Unearned revenue is a liability (you owe the service). Retained earnings are equity (owners' accumulated profit). Deferred tax is a timing liability. Share capital is the owners' injection.
Practise Liabilities and Equity
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