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    Question

    A company receives advance from customer for contract

    work. On balance sheet, this advance is:
    A Revenue recognised immediately Correct Answer Incorrect Answer
    B Shown as current liability (contract liability/advance from customers) until performance Correct Answer Incorrect Answer
    C Shown as non-current asset Correct Answer Incorrect Answer
    D Shown as owner’s equity Correct Answer Incorrect Answer
    E Shown as other comprehensive income Correct Answer Incorrect Answer

    Solution

    Advances for unperformed obligations are contract liabilities (current or non-current depending on timing).

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