When a magazine company collects cash for selling a subscription, it is an example of: select one: a. an accrued receivable transaction. b. a prepaid expense transaction. c. an accrued liability transaction. d. a deferred revenue transaction. previous page?

The answer is a) an accrued receivable transaction

Explanation:

The sale of a subscription by the magazine company can be viewed as a source of income.  A sale of a subscription service where cash is collected after the service has been provided  is treated as an accrued receivable transaction. The recognition  of revenue from the sale of the subscription is based on revenue recognition principle which states that revenues are recognized when they realized and earned.

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