what is deferred revenue?

[Manikandan]

meaning:

It is a liability because it refers to revenue that,has not yet been earned,but represents product/services that are owed to the cusromer.as the product/service is delivered overtime,it is recognized as revenue on the income statement.

statement formation:

The boss was surprised to know about his company’s deferred revenue & realised that hefty liability ahead of him.

 

[Indhumathi v]

Deferred revenue is important in accurate reporting of assets and liabilities on a company’s balance sheet.  It protects against treating unearned income as an asset, and guards against overvaluing the company’s net worth.

[boutha priya]

Deferred revenue (also called unearned revenue) refers to money received by a company before it provides the related goods or services to the customer.

[kalaivaniG]

Deferred income

Deferred income (also known as deferred revenue, unearned revenue, or unearned income) is, in accrual accounting, money received for goods or services which have not yet been delivered.

[Vishnu varadhan]

• A deferred revenue is recognized when cash is received upfront for a product before the delivery or a service before rending.
• Cash is recorded as a liability for the products or services that are due to the buyer.

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