Question

Subscription received in advance during the accounting year is _______.

Options

• An income

• An expenditure

• An asset

• A liability

Answer 1

Subscription received in advance during the accounting year is a liability.

Explanation:

Subscription income which is not related to the current year but received during the year is known as income received in advance. It is also known as unearned income and therefore, these are shown on the Liabilities side of the Balance Sheet.