Adjusting entry for deferred revenue is an accounting term used to describe an entry made to record a payment received in advance of delivery of goods or services. It’s an important business concept because it helps companies better track and recognize the value of services provided over time, rather than all at once up front. For example, instead of recognizing all of the revenue from a subscription service when subscribers pay for one year upfront, companies can adjust journal entries to recognize revenue as the service is delivered each month. This way, businesses get a better understanding of their long-term cash flow position.