What should be accounting treatment of an unearned income when the the service is provided?
There are two methods of accounting used for small businesses. Cash or accrual based accounting. This is how you treat the income that comes in. If you operate under cash accounting for your taxes, than money that is owed to you doesn't count until it is paid. If on the other hand you do your taxes based on accrual accounting than you include the receivables on the books as income.
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