A magazine publisher offers a reduced annual subscription fee if customers pay for three years in advance.

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A magazine publisher offers a reduced annual subscription fee if customers pay for three years in advance. Under this subscription program, the magazine publisher receives from customers $45,000, which it credits to Advances from Customers. The estimated cost of publishing and distributing magazines for these customers is $32,000. Why does accounting report a liability of $45,000 instead of $32,000?

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Financial Accounting an introduction to concepts, methods and uses

ISBN: 978-0324789003

13th Edition

Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis

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