A deferral adjustment may involve one asset and one expense account.

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A deferral adjustment is made to defer the recognition of revenue or expense to a later period. This typically involves adjusting one asset account and one expense account. For example, if a company receives payment for services it will provide in the future, it will recognize the payment as a liability (an asset account) and then gradually recognize the revenue as it provides the services (an expense account).

A Deferral Adjustment May Involve One Asset and One Expense