That's where accrual accounting ... For example, online retailers require payment before shipping; subscriptions are often paid in advance. In these cases, the company sets up a deferred revenue ...

Under accrual accounting, companies recognize revenue ... company's actual earnings and outstanding obligations under GAAP. Examples of Deferred Revenue Deferred revenue commonly appears when ...

With the accrual method, income and expenses are recorded as they occur, regardless of whether or not cash has actually changed hands. An excellent example is a sale on credit.