Accrued Revenue vs. Unearned Revenue: Differences, Journal Entries, and Examples

Accrued revenue is income earned by delivering goods or services but not yet billed or collected, and it is generally recorded as an asset. Unearned revenue is money received before fulfilling an obligation to the customer and is generally recorded as a liability until earned.

For example, a completed service worth 2,000 that has not been billed creates accrued revenue. A 6,000 advance payment for a one-year subscription is recognized as revenue as the service is provided. Accurate adjustments prevent overstated profits. Try Cash Cloud for free to explore invoicing and accounting tools.