PRC-1 · Chapter 4 · Question 55 of 100
What is the specific treatment of 'Pre-received income' (income received in advance) in the Statement of Financial Position?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Treated as a current liability
Explanation
Income received in advance constitutes a short-term obligation to provide a service or product, thus it is recognized as a current liability.
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