Mohling Company Typically Sells Subscriptions on an Annual Basis and Publishes

question 24

Multiple Choice

Mohling Company typically sells subscriptions on an annual basis and publishes eight times a year.The magazine sells 60000 subscriptions in January at $10 each.Recording the sale of the subscriptions involves a(n)

• A)Increase to Subscriptions Receivable and an increase to Subscription Revenue for $600000.
• B)Increase to Cash and an increase to Unearned Subscription Revenue for $ 600000.
• C)Increase to Subscriptions Receivable and an increase to Unearned Subscription Revenue for $75000.
• D)Increase to Prepaid Subscriptions and a decrease to Cash for $600000.

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Definitions:

Business Performance

A measure of how effectively a company uses its resources to achieve its objectives and fulfill stakeholder expectations.

Interest Coverage Ratio

A financial metric that measures a company's ability to pay interest on its outstanding debt.

ROE

Return on Equity; a measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.

Debt to Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.