Payment in advance, also known as prepayment, is a transaction in which a payment for goods or services is made before the actual delivery. It is often used to mitigate credit risk or secure services and goods ahead of time.
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.
