Income received in advance is a: MCQ with Answer and Explanation

Question

Share Report Error

Income received in advance is a:

A. Current Asset

B. Fixed Asset

C. Fictitious Asset

D. Current Liability

Answer: Option D

Solution (By JKSSB Mock Tests)

Money received for services yet to be performed creates an obligation to provide the service, thus it is a liability.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1

Which of the following decisions relates to determining the optimal capital structure?

A. Investment Decision

B. Dividend Decision

C. Liquidity Decision

D. Financing Decision

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
The financing decision involves choosing the right mix of debt and equity (capital structure) to minimize the overall cost of capital.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

In cost accounting, the term 'Opportunity Cost' means:

A. The cost of raw materials

B. The depreciation cost

C. The actual cost incurred

D. The benefit foregone by choosing one alternative over another

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Opportunity cost is the potential benefit that is given up when one alternative is selected over another.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

In 'Piecemeal Distribution' during dissolution, the first priority for payment of outside liabilities is:

A. Partners' loans

B. Secured creditors up to the value of security

C. Unsecured trade creditors

D. Partners' capital balances

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Secured creditors have the first right over the assets they hold as security. Any remaining dues become unsecured.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Explore All Accountancy and Book Keeping MCQs