Deferred income

Deferred income is known as the transaction in which the money from an operation has been received but the goods and services that go hand in hand with it have not yet been transmitted.

In other words, a deferred income is accounted for when in any transaction the money is received in advance without having yet provided the other part of the agreement, which may be the provision of a service, the sale of the good or any consideration in a contract.

Deferred income is not known as real income, since it does not affect the net gain or loss in equity , so until it is not produced, income itself could not be indicated. For this reason they do not go to the income statement of an organization, but go to the liabilities of the same, because it is an obligation (a right in the case of the opposite party), a deposit by the holder.

Accounting Reference

The term deferred or anticipated is a form of accounting record that is made to quantify a right or obligation by one of the parties, either as the right to receive something (in the case of giving an advance, an advance payment, a deferred income for the other party) or the right to provide a service, otherwise. In practice, it represents an accounting record to collect a credit or debit based on when the consideration has been made.

Once the goods or services are provided, the deferred income is canceled and a new concept of real income is registered, which will go and affect the income statement, since in this case a real entry of money corresponding to the Another part of the transaction.

 

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