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Deferred Revenue
What Does Deferred Revenue Mean? A liability account used to collect deposits and other cash receipts prior to the completion of the sale.
Investopedia explains Deferred Revenue Deferred revenue is important because it's the money a company collects before it actually delivers a product. For example, a software company sells and receives payment for a computer program before it gets delivered or installed. This doesn't get recorded as straight revenue because, if something goes wrong with the job, the money is at risk.
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