[amp_mcq option1=”Advance income” option2=”Proposed income” option3=”Earned income” option4=”Accrued income” correct=”option4″]<\/p>\n
The correct answer is D. Accrued income.<\/p>\n
Accrued income is income that has been earned but not yet received. It is recorded in the accounting records as a liability, and it is recognized as income when it is received.<\/p>\n
Advance income is income that has been received but not yet earned. It is recorded in the accounting records as an asset, and it is recognized as income when it is earned.<\/p>\n
Proposed income is income that is expected to be earned in the future. It is not recorded in the accounting records until it is actually earned.<\/p>\n
Earned income is income that has been both earned and received. It is recorded in the accounting records as income.<\/p>\n
Here is a simple example to illustrate the difference between accrued income and advance income. Suppose you are a consultant who bills clients at the end of each month for the work you have done that month. If you bill a client $10,000 for work you did in January, that $10,000 would be considered accrued income. It would be recorded in your accounting records as a liability, and it would be recognized as income when you receive the payment from the client in February.<\/p>\n
Now suppose you receive a $10,000 advance from a client in January for work you will do in February. That $10,000 would be considered advance income. It would be recorded in your accounting records as an asset, and it would be recognized as income when you earn the income in February.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Advance income” option2=”Proposed income” option3=”Earned income” option4=”Accrued income” correct=”option4″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[671],"tags":[],"class_list":["post-15637","post","type-post","status-publish","format-standard","hentry","category-tally","no-featured-image-padding"],"yoast_head":"\n