unearned income
Noun: 1. Income received but not yet earned: In accounting, this refers to money received by a business for goods or services that have not yet been provided. This is typically recorded as a liability on the company's balance sheet until the service is performed or product is delivered. 2. Personal income not derived from work or services: This refers to money received by an individual from sources other than employment or active business, such as returns on investments, property rentals, or inheritance.
Accounting Context:
- The advance payment from the client was recorded as unearned income until the project was completed.
- Unearned income appears on the balance sheet as a current liability.
Personal Finance Context:
- His portfolio generates significant unearned income from dividends and bond interest.
- Rent from her apartment building is considered unearned income.
- "Unearned income" vs. "Earned Income": A key distinction in tax and personal finance. Earned income is compensation from active work (wages, salaries), while unearned income is passive.
- For tax purposes, capital gains are often treated differently from earned income.
Unearned Revenue (n): A synonym in accounting contexts for income received in advance.
- The magazine subscription fees are booked as unearned revenue.
Passive Income (n): A closely related term in personal finance, emphasizing income received with minimal daily effort.
- Building sources of passive income is a common financial goal.
- Investment income: Income from investments.
- Portfolio income: Income from a collection of investments.
- Passive earnings: Money earned with little to no active involvement.
- To accrue unearned income: To accumulate such income on accounting books.
- The company will accrue unearned income until the service period elapses.
- "Money for nothing": A colloquial idiom sometimes associated with the concept of unearned income, implying payment without work. (Note: This idiom can have a negative connotation.)
- He views his stock dividends as "money for nothing."
- (accounting) income received but not yet earned (usually considered a current liability on a company's balance sheet)
- personal income that you did not earn (e.g., dividends or interest or rent income)