Answer / murali krishna

Deferred revenue, or unearned revenue, refers to advance payments for products or services that are to be delivered in the future. The recipient of such prepayment records unearned revenue as a liability on a balance sheet, because it refers to revenue that has not yet been earned, but represents products or services that are owed to a customer. As the product or service is delivered over time, it is recognized as revenue on the income statement.

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