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- Name – Quiz 14 – Accrued Income – (Answers)
- Topic – Accrued Income
- Answers with Explanation
Q1. Accrued income relates to a future accounting period.
Ans. The given statement is False. Accrued income relates to the current accounting period, however, it is received in future.
Q2. ‘Accrued Income A/C’ is _____ to post the journal entry for accrued income.
Ans. Debit – Accrued Income A/C & Credit – Income A/C while journalizing accrued income.
Q3. Rent received in advance is accrued income for your business.
Ans. The given statement is False. Rent received for a building/land is an unearned income, unearned revenue, or income received but not earned. It is the opposite of accrued income.
Q4. Commission earned but not received is an example of accrued income.
Ans. The given statement is True. Commission earned by the business but not yet received is another revenue item where actual money is yet to be received. It is a clear example of accrued income.
Q5. Accrued income is a _____ account.
Ans. Accrued income is a personal account.
Q6. Interest accumulated on investment is accrued income for your business.
Ans. The given statement is True. Accrued interest on investment is an income earned but not received; therefore, it is accrued income for your business.
Q7. Although such income is not in hand, it is to be recorded in the books.
Ans. The given statement is True. Accrued income is recorded because of the matching principle and accrual basis of accounting.
Q8. Accrued income is also called _____.
Ans. Accrued income is also known as outstanding income as it is yet to be received. Deferred income is unearned income and not accrued income.
Q9. Accrued income is recorded in _____.
Ans. Accrued income is to be recorded on the asset side of a balance sheet under the head current assets.
Q10. Accrued income is treated as _____.
Ans. Accrued income is a current asset for the business as income is yet to be received.
Q11. The meaning of the word ‘Accrued’ is _____.
Ans. The word accrual means accumulation and addition of something over a period of time.
Q12. Accrued income is recorded in the _____ period when it is due.
Ans. It is to be recognized in the same year it arises as per the accrual basis of accounting.
Q13. Accrued income is _____ but not received.
Ans. Accrued income is the income which is earned but not yet received.