What distinguishes unearned revenue from other liabilities?

Unearned revenue is specifically characterized by the fact that cash is received from customers before the corresponding goods or services are provided. This creates a liability because the company has an obligation to fulfill a future performance obligation, such as delivering a product or rendering a service. Until the company delivers on this obligation, the money received cannot be classified as earned revenue, which distinguishes it from other types of liabilities that might not involve a prepayment.

In contrast to this, the other options do not accurately reflect what unearned revenue represents in financial accounting. For instance, unearned revenue is not directly classified as earned revenue since, by definition, it has not yet been earned. Additionally, it does have a proper classification on the balance sheet, typically listed under current liabilities if it's expected to be settled within a year. Lastly, unearned revenue doesn't exclusively rely on cash payments; it can also arise from other forms of consideration, making the idea of it being "paid in cash only" misleading.