Differentiate Deposit and Prepayment

[Joan Joann]

Hello all, this is my first post. Hope to get help on the question I have.
It is common in my company to engage service from event organiser for company event. Usually the event organiser would require a 50% deposit from contract amount. The balance 50% to be paid after event is completed.
I have been booking this deposit under deposit account looking at its nature as a security deposit to start the operation. Recently, I have been told that this should be treated as prepayment as we prepaid 50% and it is only for non-financial poeple who tends to treat it as deposit. I am so consufed. Appreciate if I can get some comment here.

 

[kirby]

A security deposit is typically going to be on deposit for a longer period of time. For example, like leaving a deposit when renting a space long term. As your item is shorter term a "prepayment" does fit better. And apparently folks at your company who get thrills from pointing out this distinction have lots of time on their hands.

 

[Joan Joann]

Appreciate for ur reply, Kirby. That makes sense.