Real Losers, a diet magazine, collected $360 000 in subscription revenue in May. Each subscriber will receive an issue of the magazine for each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. By the end of December, how much Subscription revenue has been earned?
A)$120 000
B)$210 000
C)$12 000
D)$360 000

Question

Quizplus · Accepted Answer

By the end of December, 7 months of the subscription period have passed (June to December). Therefore, the earned subscription revenue is (7/12) of $360,000, which is $210,000.

Real Losers, a Diet Magazine, Collected $360 000 in Subscription