What is unearned revenue?

Unearned revenue, also known as deferred revenue, is money received by a company in advance for goods or services that have not yet been provided. This type of revenue is recorded as a liability on the company's balance sheet until the goods or services are delivered, at which point it is recognized as revenue on the income statement. Examples of unearned revenue include prepaid subscriptions, advance payments for services, and gift cards.

Unearned revenue is money that has been received in advance of a service being provided or a product being delivered. It is considered a liability on a company's balance sheet until the service is provided or the product is delivered. At that point, the unearned revenue is converted to revenue.