A Company Pays $360 for a Yearly Trade Magazine on August

question 60

True/False

A company pays $360 for a yearly trade magazine on August 1. The adjusting entry on December 31 is debit Unearned Subscription Revenue, $150 and credit Subscription Revenue, $150.

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Definitions:

Deferred Tax Liability

It's a tax obligation that arises from income already earned and recorded for accounting purposes, but payment is deferred to the IRS until a future date.

Subsidiary

An entity that is controlled by a higher entity, usually through majority shareholding, and is included in the financial statements of the controlling entity through consolidation.

Investment

The allocation of resources, usually financial, in expectation of a future return or profit.

Equity

The value of an ownership interest in a company, represented by the portion of the company's assets that would be distributed to shareholders after settling all liabilities.