Income earned but not yet received or recorded.Select one:a.Prepaid Expensesb.Accrued Incomec.Prepaid Expensesd.Closing entries

Break Down the Problem

1. Identify the terminology used in accounting.
2. Analyze each option presented to determine which one relates to income that has been earned but not yet received or recorded.

Relevant Concepts

• Accrued Income refers to revenue that has been earned but not yet received or recorded in the financial statements.
• Prepaid Expenses are payments made in advance for services or goods to be received in the future.
• Closing Entries are journal entries made at the end of an accounting period to transfer balances from temporary accounts to permanent accounts.

Analysis and Detail

1. Option A: Prepaid Expenses - This does not fit the description since it pertains to future expenses, not income that has been earned.
2. Option B: Accrued Income - This is the correct term, as it specifically refers to income earned during a period but not yet collected or recorded.
3. Option C: Prepaid Expenses - This is a repetition of option A and is still incorrect.
4. Option D: Closing Entries - This relates to the end of accounting periods, not to the concept of earned income that is not yet received.

Verify and Summarize

After careful analysis, the term that accurately describes income that has been earned but not yet received is "Accrued Income."

Final Answer

B. Accrued Income