Final answer:
Two methods to defer revenue recognition until the company receives cash are recording cash received from customers as unearned revenue and recording revenue when the company collects cash from customers.
Step-by-step explanation:
When a firm wants to defer revenue recognition until they receive cash, they have two main methods to choose from: cash received from customers can be recorded as unearned revenue, and revenue can also be recorded when the company collects cash from customers, as in the case of cash sales.
For example, let's say a company sells annual subscriptions to a service. When a customer purchases a subscription, the company can record the cash received as unearned revenue, since the service has yet to be provided. Revenue recognition is deferred until the company fulfills its obligation by providing the service.