Which is an unearned income?

Insurance premium received in advance

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Rent received in advance

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Depreciation

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Both A & B

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Solution

The correct option is C Both A & B
Unearned Income is that income which is received in advance. That mean income received against which services are not provided so far.
Insurance premium received in advance and Rent received in advance are the cases of unearned income. Accounting entry will be passed as under:

Income A/c Dr.
To Unearned Income

Unearned Income is a liability and to be shown in the balance sheet.

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