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      Question

      If a government grant is received but later becomes

      refundable, how should it be accounted? 
      A By recording it under contingent liabilities Correct Answer Incorrect Answer
      B As an expense in the year of refund Correct Answer Incorrect Answer
      C By treating it as a liability in the financial statements Correct Answer Incorrect Answer
      D By adjusting it against future government grants Correct Answer Incorrect Answer

      Solution

      The correct answer is C

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