What is defined as payments received for services that have not yet been performed?

The term that describes payments received for services that have not yet been performed is “deferred revenue.” This accounting concept refers to money that a company collects for goods or services that it has not yet delivered or rendered. When a business receives advance payment, it's recognized as a liability on the balance sheet until the service is completed or the product is delivered. Only at that point can the revenue be recognized in the income statement as earned income.

Using terms like “unearned income” might seem appropriate because it also captures the notion of receiving money without having yet fulfilled the service. However, it is less precise in accounting context than "deferred revenue," which is the standard terminology for this scenario. The other options, such as “future earnings” and “pending income,” do not accurately describe the accounting treatment for funds received in advance of service completion, as they do not imply the liability aspect that accompanies deferred revenue.