Can you think of other scenarios or examples of prepaid income?
Suggested answers to practice activity 6.10
Examples of prepaid income are:
i. Rental income of ₦150,000 becomes due to be received on 31 January 2015 but is received on 30 November 2014. The accounting year ends on 31 December 2014.
ii. The sale of goods by sales agents attracts an agent’s commission of 1% on every item sold. The commission is due to be received on 31 March 2017 but is received on 1 September 2016. The accounting year ends on 31 December 2016.
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