Unearned revenue, also known as deferred revenue, is a term used in accounting to refer to money received by a company from its customers for products or services that have not yet been provided or delivered. It is recorded on a companys balance sheet as a liability because it represents a debt owed to the customer. Once the product or service is delivered, unearned revenue becomes revenue on the income statement. Unearned revenue is most common among companies selling subscription-based products or other services that require prepayments. Examples of unearned revenue include rent payments made in advance, prepaid insurance, legal retainers, airline tickets, prepayment for newspaper subscriptions, and annual prepayment for the use of software. Unearned revenue is usually disclosed as a current liability on a companys balance sheet. It is beneficial to a company to receive funds early as it increases its cash flow that can be used for a variety of business functions.