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    • Question

      A client pays the firm ABC an amount of ₹12,000 on 28

      February to avail services for the next 60 days. ABC uses accrual basis of accounting and closes the books on 31 March. Which account (and what type of account) will be involved as recorded in the balance sheet?
      A Outstanding Expenses (Liability) Correct Answer Incorrect Answer
      B Unearned Income (Asset) Correct Answer Incorrect Answer
      C Accounts Receivable (Asset) Correct Answer Incorrect Answer
      D Prepaid Expenses (Liability) Correct Answer Incorrect Answer

      Solution

      The correct answer is B

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