prepaid income

prepaid income definition - business

prepaid income

Compensation received in advance of a promised service or delivery of a good. Prepaid income is generally taxable in the year in which it is received, unless a taxpayer uses the accrual method of accounting, in which case the income is reported as the service is performed.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.