Deferred Credit

Amazon Prime has become one of the premier subscription services on the internet, combining expedited delivery, original video content streaming, music streaming, and a voluminous library of books to download and read on a Kindle. However, since the subscription fee is paid up from each month for the future service, it's considered, for bookkeeping purposes, to be a "deferred credit." It's removed as a liability from the corporate balance sheet when the service receipt has been realized and balanced out.

Any type of payment remitted up front ahead of service or product receipt is considered a deferred credit. This includes mail-in or internet orders for products or services from food deliveries to downloads of software to retainer fees for attorneys.