Asked by
Verified
A company receives $360 for a 12-month trade magazine subscription on August 1. The adjusting entry on December 31 is a debit to Unearned Subscription Revenue of $150 and a credit to Subscription Revenue of $150.
Unearned Subscription Revenue
Income received for subscriptions that have yet to be fulfilled or delivered to the customer, considered a liability until earned.
Subscription Revenue
Income earned by a company through the sale of subscriptions for services or products, often recognized over the subscription period.
Trade Magazine Subscription
The cost incurred by a business for subscribing to a publication that targets a specific industry or professional field.
- Recognize and describe the various adjustment categories, encompassing accruals and deferrals.
- Describe the function of adjusting entries in influencing the accounts reported in financial statements.
- Understand the principle of deferred revenue and the method of its recognition.
Verified Answer
Learning Objectives
- Recognize and describe the various adjustment categories, encompassing accruals and deferrals.
- Describe the function of adjusting entries in influencing the accounts reported in financial statements.
- Understand the principle of deferred revenue and the method of its recognition.
Related questions
A Company Realizes That the Last Two Days' Revenue for ...
An Adjusting Entry Would Adjust Revenue So It Is Reported ...
The Difference Between Deferred Revenue and Accrued Revenue Is That ...
Adjusting Entries Affect Balance Sheet Accounts to the Exclusion of ...
An Example of Deferred Revenue Is Unearned Rent