Can Anyone tell me the difference between unearned revenue and deferred revenue (if there is any) And if so, Plz give a clear example of both.
both are the same
like when you get money for some service you are going to service in the future. say i gave you 20$ to mow my lawn next week, that’s your unearned/deferred revenue until you can establish recognition of service/ do it. don’t confuse it with accrued revenue, which is service you have done but haven’t received money for yet.
accrued revenue = booked revenue on income statement but have not earned it. deferred revenue = earned revenue but have not booked it.
what is unearned revenue? thommo77 Wrote: ------------------------------------------------------- > accrued revenue = booked revenue on income > statement but have not earned it. > > deferred revenue = earned revenue but have not > booked it.
The classic example is magazine subscriptions. You get paid up front, but you owe 11 more magazines over the next year. I believe cash is increased and unearned revenue(liability) is increased. Hope that helps
thommo77 Wrote: ------------------------------------------------------- > accrued revenue = booked revenue on income > statement but have not earned it. > > deferred revenue = earned revenue but have not > booked it. Don’t know why no one is not correcting this. Accrued revenue, earned revenue increased accounts receivable, billed revenue. Does not show up all that often. Deferred/Unearned revenue, revenue that you have been paid on but have not fully delivered the service. In good times companies will place a lot of revenue in unearned category to harvest it in the bad times.