The normal balance of unearned consulting fees is liability entered on the credit side.
What is liability?
The legal debts owed by a firm to third-party creditors are referred to as liabilities. Accounts payable notes payable, and bank debt is examples of these types of obligations.
In order to operate and flourish, every company must take on liabilities. A company's foundation is built on a healthy balance of liabilities and equity.
A receipt of income before it has been achieved is known as unearned income. Unearned income is accounted for as a liability on a business's balance sheet. The revenue has yet to be generated and indicates goods or services owing to a client so it is viewed as a liability for the business.
Therefore, consulting fees are unearned so they will also show on the liability side of the balance sheet.
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