Definition

Noun: 1. (Accounting) Deferred income: Money received by a business for goods or services that have not yet been delivered or performed. This is recorded as a liability on the company's balance sheet until the obligation is fulfilled. 2. Unearned personal income: Personal income received from investments or assets, such as dividends, interest, or rent, rather than from active work or employment.

Usage Examples

• Accounting Context:

  • The magazine publisher records subscription payments as unearned revenue until the issues are mailed.
  • A liability account titled "Unearned Revenue" shows the amount of services still owed to customers.

• Personal Income Context:

  • His income from stock dividends is considered unearned revenue.
  • Living off unearned revenue like bond interest requires significant capital.

Advanced Usage

• Recognition Principle: In accrual accounting, revenue is only recognized (recorded as earned income) when the service is performed or the product is delivered. Until that point, the cash received remains "unearned."
• Balance Sheet Treatment: Unearned revenue is a critical component of a company's current liabilities, reflecting its future obligations to customers.

Variants and Related Words

• Deferred Revenue: A synonymous term used in accounting for unearned revenue.
• Advance Payment: A general term for money received before a good or service is provided, which may become unearned revenue.
• Earned Revenue/Income: The opposite concept; income that has been received earned by completing the corresponding work or sale.

Synonyms

• Deferred income
• Prepaid income
• Advance income (in accounting contexts)

Related Phrases

• To defer revenue: The accounting action of classifying a payment as unearned revenue.
• Revenue recognition: The accounting principle governing when unearned revenue becomes earned revenue.

Related Idioms/Concepts

• "Money for nothing": A colloquial idiom that loosely relates to the concept of unearned personal revenue, implying income received without direct labor. (Note: This idiom is often used critically or humorously.)

Noun

1. (accounting) income received but not yet earned (usually considered a current liability on a company's balance sheet)
2. personal income that you did not earn (e.g., dividends or interest or rent income)