Returning IEnumerable vs. IQueryable

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What is the difference between returning IQueryable<T> vs. IEnumerable<T>, when should one be preferred over the other?

IQueryable<Customer> custs = from c in db.Customers
where c.City == "<City>"
select c;

IEnumerable<Customer> custs = from c in db.Customers
where c.City == "<City>"
select c;

Will both be deferred execution and when should one be preferred over the other?

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