Write a paragraph to explain why unearned revenues are liabilities instead of revenues. In your explanation, use

Question:

Write a paragraph to explain why unearned revenues are liabilities instead of revenues. In your explanation, use the following actual example: The New York Times, a national newspaper, collects cash from subscribers in advance and later provides news content via print newspapers and online access to subscribers over a one-year period. Explain what happens to the unearned revenue over the course of a year as The New York Times delivers papers and online content to subscribers. Into what account does the earned subscription revenue go as The New York Times delivers papers and online content? Give the journal entries that The New York Times would make to
(a) collect $65,000 of subscription revenue in advance and
(b) record earning $55,000 of subscription revenue. Include an explanation for each entry, as illustrated in the chapter.
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting

ISBN: 978-0134127620

11th edition

Authors: Walter Harrison, Charles Horngren, William Thomas, Wendy Tietz

Question Posted: