Physicians, Inc

question 39

Multiple Choice

Physicians, Inc. subscribes to three magazines and paid $140, $90 and $76 respectively, on 1 July. The subscriptions are for one year and are recorded in Prepaid Subscriptions when paid. Six months later on 31 December, what amount is recorded for 'magazine expense' and what is the balance of the Prepaid Subscription account? Magazine Expense Prepaid Subscriptions

• A) $153 $153
• B) $306 $306
• C) $25.50 $153
• D) $25.50 $306

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Definitions:

Rescission

A remedy in which the contract is canceled and the parties are returned to the positions they occupied before the contract was made.

Contract

A legally binding agreement between two or more parties that outlines duties, obligations, and conditions that are enforceable by law.

Canceling

The act of terminating or revoking an agreement, event, or obligation before it is completed.

Material Fact

A fact that is important to the subject matter of the contract.