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