What is the difference between Unearned Revenue and Deferred Revenue?

Unearned Revenue and Deferred Revenue are two terms in accounting. There is no big difference between the two. When a company is preparing its financial records, both unearned and deferred revenues are listed under liabilities because they talk about incomes on goods and services which a company cannot fully consider as its own because the transaction on those goods and services is still ongoing.

An unearned revenue occurs when the payments for a list of goods and services have been made, but the company which is expected to deliver the products do not deliver the products at the agreed time but at a later time. Deferred revenue, on the other hand, is a kind of revenue that is gotten through a form agreement between a company and a particular client. The agreement states that the company is only delivering as it is getting payment advancements from the client. Both parties must, therefore, be ready to fulfill their own part of the agreement.

Unearned and Deferred revenue are accounting terms and are referred to revenue received by a company or organization for good or services that have not been rendered yet. These two concepts help in ensuring that assets and liabilities are accurately reported on a balance sheet. These two terms are of the same concept and can be referred to the amount paid by customers for a product or goods which has not been delivered yet. In the record of the company, it is noted as a liability.

The only slight difference between them is that Unearned revenue is the revenue which is yet to be handed over to recipient but is in the company or organization balance sheet record that a particular good is, however, to be delivered to the recipient while a deferred revenue has not been earned, but it is a product that is owed to the recipient, and those products are liable to the company or organization.