Subscriptions received in advance are

Assessment: WAEC SSCE - Financial Accounting - 2010 (Objective) Subject: Financial Accounting

Question 1 Report

Subscriptions received in advance are

included in the income and expenditure account

not included in the receipts and payment account

shown as a current asset in the balance sheet

shown in the Balance Sheet as a current liability

Answer Details

Subscriptions received in advance refers to payments received by an organization for future services or products that have not yet been provided. For example, a magazine publisher may receive subscription payments for the next year's issues before the year begins. Such payments are shown as a current liability in the balance sheet because the organization has an obligation to deliver the service or product in the future. Therefore, it is not included in the income and expenditure account or receipts and payment account until the services or products are provided.

Read lesson note on Accounts Of Not-for-profit-making Organizations (JAMB)

Read lesson note on Nature And Significance Of Accounting (JAMB)

Accounts Of Not-for-profit-making Organizations

Nature And Significance Of Accounting

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