Prepaid and accrued income, irrec debts, allowance for doutful

What is accrued income?

• Income that has been received in advance
• Income that has been earned but not yet received
• Income that will never be received
• Income that has been prepaid

How is prepaid income recorded in the financial statements?

• As an expense
• As an asset
• As a liability
• As equity

What is another term for irrecoverable debts?

• Doubtful debts
• Outstanding debts
• Bad debts
• Prepaid debts

What is the purpose of an allowance for doubtful receivables?

• To record income received in advance
• To estimate the amount of future irrecoverable debts
• To accrue income not yet received
• To record prepaid expenses

How does accrued income affect the income statement?

• It increases expenses
• It decreases revenues
• It increases revenues
• It has no impact

What happens when a debt is deemed irrecoverable?

• It is written off as an expense
• It is added to accrued income
• It is recorded as prepaid income
• It is transferred to allowance for doubtful receivables

How often should a business review its allowance for doubtful receivables?

• Monthly
• Quarterly
• Annually
• Periodically

What type of account is an allowance for doubtful receivables?

• Asset
• Liability
• Expense
• Contra-asset