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When a magazine company collects cash for selling a subscription, it is an example of: Group of answer choices

Respuesta :

Answer:

A deferred revenue transaction

Explanation:

Magazine subscriptions are payments made for future editions of a magazine. When the magazine is eventually produced it is delivered to the customer.

So when the magazine company collects cash for a subscription they are being paid for a service that is not yet rendered.

As revenue is recognised when the when it is earned (when service has been rendered), this is classified as a deferred revenue transaction.