deferred said:
please define deferred income
Deferred Income represents money received for services which have not
been performed or completed, or for merchandise which has not been
transferred to a customer. An example of deferred income is when an
insurance company receives my car insurance payment for the following
year, they would debit cash and credit deferred income. As time passes
(and they earn the premium I've paid), they would decrease the balance
in deferred income and record the income to be recognized as premium
revenue.
Deferred income accounts are often also referred to as "deferred
revenue" accounts, and basically represent situations where you get paid
before you have earned the revenues which they will represent in the future.
Hope this helps.
Also see
http://en.wikipedia.org/wiki/Deferred_income or
http://en.wikipedia.org/wiki/Deferred_revenue
Brian Tankersley, CPA.CITP
