Accounting JAMB

Subscription in advance is treated in the balance sheet as a?

A. current asset
B. current liability
C. fixed asset
D. long term liability

Correct Answer:

Option B – current liability

Explanation

current assets are assets of the company that can be easily converted to cash when needed

current liability: this is the liability owned to outsiders but still enjoying its benefit within a year e.g creditors, wages in arrears

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