DIFFERENCE BETWEEN ACCRUED REVENUE AND DEFERRED REVENUE

Question

Accepted Answer

Accrued revenue is earned but not yet received, while deferred revenue is received but not yet earned.

Accrued revenue is recorded as a receivable on the balance sheet, while deferred revenue is recorded as a liability.
Accrued revenue is recognized when the service or product is delivered, while deferred revenue is recognized when the service or product is provided.
Examples of accrued revenue include interest income and accounts receivable, while examples of deferred revenue include prepaid rent and gift cards.
Accrued revenue is common in service-based industries, while deferred revenue is common in subscription-based industries.
Accrued revenue is recognized through adjusting entries, while deferred revenue is recognized through unearned revenue entries.

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