No. You're mostly wrong.
Yes, $500,000 has been received. The second $500,000 has been billed but not received. Nothing has been recorded as revenue as of the date of the Q. It's all deferred. DR is a liability because you have received something of value but have not yet done whatever performance is required to record it as revenue. In effect, you're liable if you don't uphold your part of the deal.
On the operating section of the cash flow statement, an increase in a current liability increases cash this is why the $1,000,000 deferred revenue shows up as a positive number. On the other hand, an increase in a current asset decreases cash. In this case, it's an increase in AR representing the unpaid $500,000. That's why it shows up as a negative.
Once the second $500,000 is received, AR will go down, and cash will go up by that amount. Deferred revenue won't change unless they start recognizing it as revenue. When that happens, DR goes down and revenue, and thus Net Income, goes up which passes through to the balance sheet as an increase in equity offsetting the decrease in DR.
