Magic,Inccollected $12,000 in October 2011 from Customers in Exchange for 12-Month

question 99

Multiple Choice

Magic,Inc.collected $12,000 in October 2011 from customers in exchange for 12-month subscriptions to its monthly magazine Magic Times.The October issue was the first issue of the subscription.How much revenue should the company report on its income statement for the year ended December 31,2011?

• A)$3,000
• B)$6,000
• C)$12,000
• D)No revenue will be recognized until all the magazines are delivered.

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Definitions:

Communist Countries

Nations that operate under a communist system of government, where the state plans and controls the economy and a single, often authoritarian party holds power.

True Ownership

The actual possession of a right, property, or interest, legally recognized and free from any dispute or contention.

Tenants-In-Common

A form of co-ownership where each tenant (or owner) has an undivided interest in the property, and may have differing share sizes.

Ownership

The legal right to possess, use, control, and dispose of property, assets, or intellectual property.