A deferred credit will appear on the balance sheet as a/an:
A)Asset
B)Liability
C)Owner's equity
D)Neither. It is not shown on the balance sheet.
E)It depends on the situation.

Question

Quizplus · Accepted Answer

A deferred credit will appear on the balance sheet as a liability.
Key Takeaway: A deferred credit is income received by a business that has not yet been reported as income, usually including Unearned Income. For example, a newspaper publisher might defer a 3-year subscription to match revenue against later printing expenses (which is recommended under the matching principle). The deferred credit is classified under noncurrent liabilities. When a portion of the deferred credit is earned, the entry is to debit deferred credit and credit revenue.

A Deferred Credit Will Appear on the Balance Sheet as A/an