Fees Earned is which classification?

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Study for the Accounting CBE Exam. Gain insights with flashcards and multiple-choice questions, each paired with detailed explanations. Prepare for your accounting certification!

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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