Bina Consulting Co. collected $500 from a customer in advance to provide consulting fees for the next two months. The $500 would be recorded with a debit to Cash and a credit to the Unearned Revenues, which is a(n) (asset/liability/equity) account.
The Unearned Revenues Account is considered a liability account or more accurately a Current Liability.
It reports amounts received by a seller or service provider for goods and services to be rendered in future.
When the said good is sold or the service provided, this account is debited and the Revenue Account Credited.
This account is an important one as it recognizes the MATCHING principle of Accounting where Revenue and Expenses incurred should be attributed to the period they were acquired or incurred in.