Deferred Debits

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Definitions

Prepayment Payment in Advance Deferred Debits Accruals Concept Debit Balance Debtors Current Assets

A prepayment, also referred to as a payment in advance, is a payment made for goods or services before they are actually received. In accounting, it is treated as a deferred debit under the accruals concept and is shown as a debit balance under debtors in the current assets section of the balance sheet.