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 ...

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.

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