Computing Magazine Receives $100 in Advance from a Customer for a 2

question 19

Multiple Choice

Computing Magazine receives $100 in advance from a customer for a 2 year subscription. Computing Magazine's entry to record this transaction would include a:

• A)credit to Unearned Subscription Revenue for $100.
• B)debit to Unearned Subscription Revenue for $100.
• C)debit to Subscription Revenue for $100.
• D)credit to Subscription Revenue for $100.

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Definitions:

Retained Earnings

The portion of a company's profits not distributed as dividends to shareholders but retained by the company for reinvestment in its operations or to pay debt.

FIFO System

First-In, First-Out, an inventory valuation method where goods first added to inventory are the first ones to be sold.

Impairment

Impairment occurs when the carrying amount of an asset exceeds its recoverable amount, leading to a reduction in the asset's value on the balance sheet.

Intangible Assets

Non-physical assets such as patents, copyrights, trademarks, software, and goodwill that have value to a business.