unearned income

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Explanation of "Unearned Income"

Definition:Unearned income is money that you receive without having to work for it. This can come from various sources, such as investments, rental properties, or interest from bank accounts. In accounting, it refers to money that a company has received but has not yet earned through services or products.

Usage Instructions:

• As a noun: You can use "unearned income" to talk about types of income that do not require active work.
• In a sentence: "The money I make from my investments is considered unearned income."

Example:

• "When I receive dividends from my stocks, that is unearned income for me."

Advanced Usage:

In a more technical context, unearned income may be discussed in terms of financial planning or tax considerations. For example: - "Investors often rely on unearned income to supplement their retirement savings."

Word Variants:

• Unearned (adjective): Describing income that has not been earned.
  • Example: "Unearned revenue is shown as a liability on the balance sheet."
• Earned income (noun): Income received from working or providing services.
  • Example: "His earned income comes from his job as a teacher."

Different Meanings:

• In a broader sense, "unearned" can refer to things that are received without merit or effort, such as praise or rewards.

Synonyms:

• Passive income
• Investment income
• Portfolio income

Idioms and Phrasal Verbs:

While "unearned income" does not have direct idioms or phrasal verbs, you might encounter phrases related to financial contexts: - "Make money work for you": This means to invest your money so that it generates income without active involvement. - "Cash flow": Referring to the movement of money in and out of a business or personal finances, which can include both earned and unearned income.

Summary:

Unearned income is a crucial concept in both personal finance and accounting. It represents money that comes from investments or other sources where you do not have to actively work to receive it.

Academic

Noun

1. (accounting) income received but not yet earned (usually considered a current liability on a company's balance sheet)
2. personal income that you did not earn (e.g., dividends or interest or rent income)

Synonyms

• unearned revenue