Difference between earned income and unearned income ??

Question

When is the income earned? and when is the income unearned ??

Thanks.

Answer 1

Earned income is where you go out and work to earn the money.

Unearned income is where you don't work to get the income, such as Social Security, Unemployment, Child Support, etc.

Hope this helps.

Answer 2

Earned income is salary and proceeds from business activity.

Unearned income is interest, dividends, and some pensions.

It can get complicated if your business involves investment

or mortgages.

For the details consult a CPA.

Answer 3

As far as i can remember to my accounting subjects, the income is earned when you render your service and you have recieve in return,it might be cash or an account receivables. You have already earned it because you have rendered your services. an Unearned income is an income that you have to do your services first before you earned it. example B paid 1000 as advance payment for the month of october. It is an unearned income because even if you already receive the 1000 pesos,it doesn't necessarilly that you already earned it,since the date today is sept. there's a possibility that B will try to get back the 1000. It will remain unearned income because B has not yet consumed or used the space that she paid for. It will become an earned income when the month of oct will come, in that way B used the rental space, in return, you can consider 1000 as your earned income in return to the space that B rented. hope these clear your mind

Answer 4

Earned income  your paycheck

Unearned income- interest on your savings, stock dividends