PRC-1 · Chapter 4 · Question 57 of 100
A one-year maintenance contract fee was received by 'Delta Tech' on 1 August in advance. The company closes its books on 31 December each year. Which of the following terms is NOT related to the portion of the fee covering January to July of the next year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Accrued income
Explanation
The portion covering next year is money received but not yet earned, so it is unearned income, pre-received income, or a liability. It is NOT accrued income, which means earned but not yet received.
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