Deferred income

Answer 1

Deferred income refers to income that has been received but not yet earned. It is also referred to as unearned revenue or advance payments. This type of income occurs when a company receives payment for goods or services that will be delivered at a later date. The company recognizes the payment as a liability on its balance sheet until the goods or services are delivered, at which point the liability is reduced and revenue is recognized. Deferred income is common in industries like subscription services or long-term contracts.