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Adjustment for Revenue in Advance

Incomes recei...

Question

Incomes received in advance are regarded as ________

A

Liability

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B

Expense

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C

Asset

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D

Capital

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Solution

The correct option is A
Liability

Incomes received in advance are regarded as a liability.

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Similar questions

Q. concept states that income received in advance should be considered as a liability and not as revenue.

State the meaning of:

(a) Outstanding expenses

(b) Prepaid expenses

(c) Income received in advance

(d) Accrued income

Q. Classify the following into Assets, Liabilities, Capital, Revenue, and Expenses:

(i) Plant and Machinery;	(ii) Bank Loan;	(iii) Sales;	(iv) Rent;
(v) Discount Received;	(vi) Carriage Inwards;	(vii) Carriage outwards;	(viii) Purchases;
(ix) Bills Payable;	(x) Wages;	(xi) Advance Income;	(xii) Accrued Income;
(xiii) Goodwill;	(xiv) Furniture and Fixtures;	(xv) Outstanding Expenses;	(xvi) Capital.

State the meaning of

(a) Outstanding expenses

(b) Prepaid expenses

(c) Income received in advance

(d) Accrued income

Q. Which of the following are current assets of a business?
(i) Income received in advance
(ii) Stock
(iii) Debtors
(iv) Pre-paid expenses
(v) Accrued income
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