Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 36 - No. 41)
What is the impact of adjusting for prepaid income?
It increases the company’s assets and liabilities.
It decreases the company’s revenue and decreases the company's expenses.
It increases the company’s assets and decreases the company's liabilities.
It decreases the company’s liabilities and increases the company's income.
Explanation
Prepaid income becomes income (revenue) and reduces the obligation (liability) to the customer.
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