Deferred debit

A deferred debit is an expenditure that has not yet been consumed, so it is temporarily classified as an asset. Once the expenditure has been consumed, it is charged to expense. Deferred debits are usually classified within the prepaid expenses account, which appears as a current asset in the balance sheet. Examples of deferred debits are prepaid insurance, prepaid medical costs, and prepaid advertising.

Similar Terms

A deferred debit is also known as a prepaid expense.