PRC-1 · Chapter 10 · Question 79 of 100
An entity received Rs. 3,850 in total for 'Other Income' during the year. However, Rs. 1,250 of this relates to services to be provided next year. What is the amount of Other Income reported in the current year's Statement of Comprehensive Income?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 2,600
Explanation
The portion relating to next year is 'Unearned Income' (a liability) and must be deducted from the received amount. Recognized Income = 3,850 - 1,250 = Rs. 2,600.
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