<P> Deferred income (also known as deferred revenue, unearned revenue, or unearned income) is, in accrual accounting, money received for goods or services which have not yet been delivered . According to the revenue recognition principle, it is recorded as a liability until delivery is made, at which time it is converted into revenue . </P> <P> For example, a company receives an annual software license fee paid out by a customer upfront on January 1 . However, the company's fiscal year ends on May 31 . So, the company using accrual accounting adds only five months' worth (5 / 12) of the fee to its revenues in profit and loss for the fiscal year the fee was received . The rest is added to deferred income (liability) on the balance sheet for that year . </P>

Where is deferred income on the balance sheet