Fees Earned is which classification?

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Prepare for the Accounting CBE Exam with multiple-choice questions and detailed explanations. Study effectively with interactive quizzes and maximize your exam readiness. Get ahead and succeed!

Multiple Choice

Fees Earned is which classification?

Explanation:
Fees earned represents income generated from providing services. In accounting, that is revenue, which is reported on the income statement and increases the owner's equity through net income. It is not an asset (a resource you own), not a liability (an obligation), and not an expense (the cost of doing business). Revenue accounts typically have a credit normal balance, so increasing fees earned increases credits. Therefore, the classification is revenue.

Fees earned represents income generated from providing services. In accounting, that is revenue, which is reported on the income statement and increases the owner's equity through net income. It is not an asset (a resource you own), not a liability (an obligation), and not an expense (the cost of doing business). Revenue accounts typically have a credit normal balance, so increasing fees earned increases credits. Therefore, the classification is revenue.

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