Why is income received in advance a liability?

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We get income in advance. We debit AR and credit deferred income. Auditor insis...
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Tony Thomas
05-November-2015

Question added by SREEDEVI SUNILKUMAR , Business finance officer , Emirates Airline
Date Posted: 2014/04/10

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Zahid Shafi Choudhri

by Zahid Shafi Choudhri , Senior Accountant - Owner Operator , MSC Accounting Services, Surrrey - British Columbia, Canada

Advances received by customer is a liability for the company against which work has to be completed and delivery has to be made to the customer

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