Earned, but yet not received income is treated as an asset.
An asset is a resource with economic value that an individual, corporation, or other entity owns or controls with the expectation that it will provide future benefit. Assets can be classified into tangible assets, intangible assets, and financial assets.
Tangible assets are physical objects that have value, such as land, buildings, equipment, and inventory. Intangible assets are non-physical assets that have value, such as patents, trademarks, and copyrights. Financial assets are claims to future cash flows, such as stocks, bonds, and loans.
Earned, but yet not received income is a type of financial asset. It is a claim to future cash flows that the company has earned but has not yet received. This type of asset is classified as a current asset because it is expected to be converted into cash within one year.
The other options are incorrect because:
- A liability is a debt or obligation that a company owes to another party.
- A loss is a decrease in the value of an asset or an increase in the value of a liability.
- Capital is the total assets of a company minus its total liabilities.