Prepaid
/ˈpriːpeɪd/
Definitions
- (adj.) Describes an arrangement where payment is made in advance for goods or services.
The customer purchased a prepaid phone plan to avoid monthly bills.
- (adj.) Refers to funds or expenses paid before the related benefit or service is received, especially in accounting.
Prepaid expenses must be recorded as assets until they are utilized.
Related terms
See also
Commentary
Used primarily as an adjective; important to distinguish from postpaid or credit-based arrangements in contracts and accounting.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.