Definition of Deferred credit:
A deferred credit is income that is received by a business but not immediately reported as income because it has not yet been earned. The unearned income is money received for a service not yet rendered or a product not yet officially sold and has yet to be matched with a related expense. Such items include consulting fees, subscription fees, and any other revenue stream that is intricately tied to future promises. The deferred credit is kept as a liability on the balance sheet until the revenue is actually earned. Then, it is recognized as income and the liability is removed from the balance sheet.
Deferred credit is also known as deferred revenue, deferred income or unearned income.
Prepayment received from customers or tenants, and carried forward as a liability until the associated goods, services, or benefits are delivered. Also called deferred liability or deferred revenue.
Meaning of Deferred credit & Deferred credit Definition