If a Company Has Advance Subscription Sales Totaling $45,000 for the Upcoming

question 87

Multiple Choice

If a company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers, the receipt of cash would be journalized as:

• A) Debit Cash $45,000, credit Sales $45,000.
• B) Debit Sales $45,000, credit Unearned Revenue $45,000.
• C) Debit Prepaid Subscriptions $45,000, credit Sales $45,000.
• D) Debit Unearned Revenue $45,000; credit Sales $45,000.
• E) Debit Cash $45,000; credit Unearned Revenue $45,000.

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Definitions:

Recognizes Revenues

Recognizing revenues involves the accounting process of recording income when it is earned, which may not necessarily coincide with when payment is received.

Not-for-Profit Organizations

Entities that operate for purposes other than to make a profit, typically focusing on charitable, educational, or social objectives.

Public Accountants

are certified professionals who provide accounting services, including auditing, tax advice, and financial planning, to the public.

GAAP Standard

Generally Accepted Accounting Principles, the set of accounting standards used in the United States to ensure accuracy and consistency in financial reporting.