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

Question Report Error

Income received in advance is a:

A. Fixed Asset

B. Current Asset

C. Fictitious Asset

D. Current Liability

Answer: Option D

Solution (By JKExamLibrary)

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

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Practice More Accountancy and Book Keeping Questions

Question #1 Report Error

Which of the following is an indirect tax in India?

A. Income tax

B. Corporation tax

C. Wealth tax

D. GST

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Correct Answer: Option D

Explanation:
GST is an indirect tax on supply of goods and services.

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

Question #2 Report Error

A 'Master Budget' is a summary of:

A. Only sales budget

B. All functional budgets

C. Only production budget

D. Only cash budget

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Correct Answer: Option B

Explanation:
Master budget consolidates all subsidiary budgets into one comprehensive plan.

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

Question #3 Report Error

A company issued 10,000 shares of ₹10 each at par, payable ₹2 on application, ₹3 on allotment, ₹5 on call. A shareholder holding 500 shares failed to pay call money. Calls-in-arrears amount is:

A. ₹1,500

B. ₹1,000

C. ₹5,000

D. ₹2,500

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Correct Answer: Option D

Explanation:
Call money unpaid = 500 shares * ₹5 = ₹2,500.

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

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