Deferred Charge

  

Categories: Accounting, Metrics

Also known as a prepaid expense. It's an item or service that's been purchased but not yet received or consumed. In the account books, it will be listed as an asset until it's used. At that point, it'll be switched to the expense column.

Say your retail business prepaid its rent for the next six months. This would be a deferred charge, and at the end of each month, your accountant would reclassify that portion of the rent as an expense.

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Finance allah shmoop what is deferred compensation Well you don't

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get it today You get it next year at some

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point you know differed If you've gotten paid today it

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would have binford but then it was deford's so well

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yeah it's money you don't get right now Yeah so

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whywould compensation be deferred Well lotsa reasons think about a

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bonus that a sales person might earn through out the

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year like they get two grand in bonus money payable

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january messed around in february and march and was a

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good boy in april may and june and then on

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lee hit one more sales goal ahead of christmas doing

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hitting his sales bonus target and we'll have owed to

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deferred and noting that all bonuses are paid in january

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of the following year like it's deferred to the following

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year So from the company's perspective they show deferred compensation

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Sheet is a liability And then they converted to being

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an expense when they pay everything out the first month

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