The adjustment to be made for income received in advance is:
ADeduct income received in advance from respective income and show it as an asset in the Balance Sheet
BDeduct income received in advance from respective income and show it as a liability
CAdd income received in advance to respective income and show it as a liability
DAdd income received in advance to respective income and show it as asset
Correct answer
B. Deduct income received in advance from respective income and show it as a liability
Explanation
B. Income received in advance given as an adjustment requires a deduction of the same from the income amount and disclosure of the same as a liability in the Balance Sheet.