deficit

Excess of expenses over income or liabilities over assets.

deficiency balance

Amount left over when the money realized from the sale of a foreclosed property is insufficient to pay off the full loan amount. This is one of the reasons banks usually insist on the borrower's personal guaranty so that they can go after his or her home or other property to make up the shortfall.

deferred tax liability

Taxes a company must pay but not in the current accounting period. Taxes will be paid in a future year.

deferred tax asset

When a company utilizes an asset to reduce the amount of income taxes owed. This can only happen if there is a definite reason that a company will be able to afford operating costs for the next accounting period.

deferred rebate

Arrangement under which a carrier offers to refund a percentage of the total freight charges to shippers who commit their cargo for a certain period (usually six months) to the carrier. This refund is paid out at the end of the period.

deferred profit-sharing plan

Type of deferred compensation plan in which an employee's shares are held in a trust with other accrued benefits until his or her retirement, in order to qualify for lower rate of income tax.

deferred payment letter of credit

A letter of credit that is paid a fixed number of days after shipment or presentation of prescribed documents. It is used where a buyer and a seller have a close working relationship because, in effect, the seller is financing the purchase by allowing the buyer a grace period for payment.A deferred ...

deferred income tax liability

Excess of income tax amount shown on an income statement over the actual tax amount, which occurs when book-income exceeds taxable income. This excess is recognized as a liability in the taxpayer's balance sheet, and is written off in the following accounting period.