Question

In January 2020, Livingston Publishing sells three-year subscriptions to its annual publication to 500 customers for $30 each. Under the accrual basis of accounting, the entry to record the cash received includes Multiple choice question. A credit to Deferred subscription revenue for $15,000 A credit to Deferred subscription revenue for $5,000 A credit to Subscription revenue for $15,000

Answer 1

Under the accrual basis of accounting, the entry to record the cash received for the sale of three-year subscriptions in January 2020 would include a credit to Deferred subscription revenue for $15,000.

Step-by-step explanation:

Under the accrual basis of accounting, the entry to record the cash received for the sale of three-year subscriptions in January 2020 would include a credit to Deferred subscription revenue for $15,000. This is because the revenue has not yet been earned and should be recognized over the three-year subscription period. The cash received is considered a liability until the revenue is earned.

Answer 2

A credit to Deferred subscription revenue for $15,000

Step-by-step explanation: