alleryIncome received in advance is shown as:
AAsset on Balance Sheet
BCapital addition entry
CIncome credit in P&L
DLiability on Balance Sheet
Answer & Solution
Correct answer: D. Liability on Balance Sheet
1. Income received in advance pertains to a future period.
2. It is a current liability at year end.
3. It is removed from current year's P&L credit and shifted to liabilities.
_Source: ICAI BoS Foundation Paper 1, Ch 7 U1 "Final Accounts", §1.2 matching ¶3_
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