An essential accounting concept, deferred revenue is also called unearned revenue or prepaid revenue. An occasion occurs when a company obtains payment from a customer for items or services that have not yet been provided or delivered. In accrual accounting, recognizing deferred revenue is essential for matching revenues with the period in which the goods or services are delivered. This ensures accurate financial reporting. The process of recording deferred revenue involves creating a liability on the balance sheet. Upon earning revenue, this liability is later reduced