deferred sales

Deferred sales refer to transactions where the payment or recognition of revenue is postponed to a future date. This often happens when a company agrees to deliver a product or service later, or when a customer pays upfront but the company hasn’t yet fulfilled its obligation. Instead of recognizing the full sale immediately, the company records it as a liability (deferred revenue) on its balance sheet. Over time, as the company delivers the goods or services, the deferred sales are gradually recognized as actual revenue, aligning income with the completion of the sale.