passwella.
Menu

WAEC Financial Accounting 2020 Question 46

Question 46

Accruals and Prepayments

Income received in advance is treated in the balance sheet as a

  1. A.current liability.
  2. B.current asset.
  3. C.long-term liability.
  4. D.fixed asset.
Show the answer and explanation

Answer: A (current liability.)

Explanation

Income received for a future period is owed back in services, so it is a current liability.