WAEC Accounting 2020 Objective — Question 46

Question 46 of 50 from the West African Examinations Council (WAEC) Accounting 2020 Objective paper, with the correct answer and a full explanation.

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

A. current liabilityCorrect
B. current asset
C. long-term liability
D. fixed asset

Explanation

Income received in advance is a debt on the part of the receiver. Thus, it is treated as a current liability since it is not yet due when it was received.

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