Deferred Revenue
A liability account used to collect deposits and other cash receipts prior to the completion of the sale. Investopedia Says:
Deferred revenue is important because it's the money a company collects before it actually delivers a product. For example, a software company sells and receives payment for a computer program before it gets delivered or installed. This doesn't get recorded as straight revenue because, if something goes wrong with the job, the money is at risk. Related Terms:
Liability
Revenue |