Question

Subscription received in advance is:

• A. Asset
• B. Income
• C. Expense
• D. Liability

Hint:

Subscription received in advance = Unearned income → always shown as liability until earned.

Answer 1

The Correct Option is D

Step 1: Meaning.
When a non-trading organisation receives subscription for the next year in advance, it has not yet been earned.
Step 2: Why liability?
The organisation is obliged to provide services in the next year for which subscription is already received. Until then, it remains an unearned income.
Step 3: Treatment.
Hence, subscription received in advance is shown as a liability in the Balance Sheet.
Final Answer: \[ \boxed{\text{Liability}} \]