What is a deficiency account?
submitted by Ty Malone

renson

Basically, you've got an asset, but it turns out it's not worth as much as you thought, so you have to record a deficiency. It's a way of showing that there's a gap between what the asset is worth and what you owe or expected to get.

Dax

A deficiency account is where you record certain losses. You'd use it when an asset's book value is more than what you could realistically sell it for.