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Question
Subscription received in advance during the accounting year is _______.
Options
An income
- An expenditure
An asset
A liability
MCQ
Fill in the Blanks
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Solution
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.
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Chapter 2: Accounts of ‘Not for Profit’ Concerns - Exercise 2.1 (Objective Type Questions) [Page 112]
