As a result of the above, which of the following is a correct statement? A) The firm had an asset called 'accrued subscriptions receivable' at the end of the year amounting to $120,000. B) The firm's net cash flow (increase or decrease in the cash balance) was less than its reported income (ignoring taxes) for the year. C) The firm reported income (ignoring taxes) for the year in the amount of $70,000. D) The firm recognized revenue for the year in the amount of $140,000. E) The firm had a liability for undelivered periodicals at the end of the year amounting to $200,000.
As a result of the above, which of the following is a correct statement? A) The firm had an asset called 'accrued subscriptions receivable' at the end of the year amounting to $120,000. B) The firm's net cash flow (increase or decrease in the cash balance) was less than its reported income (ignoring taxes) for the year. C) The firm reported income (ignoring taxes) for the year in the amount of $70,000. D) The firm recognized revenue for the year in the amount of $140,000. E) The firm had a liability for undelivered periodicals at the end of the year amounting to $200,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please help me with explanation what is correct option with explanation please without plagiarism
Transcribed Image Text:During the first year of its operations, a publishing company received $200,000 from sales of
periodical subscriptions. At the end of the year, management determined that 40% of the
subscription requirements had been fulfilled through mailings of periodicals to subscribers.
In addition (to the above), sales of periodicals through newsstands amounted to $60,000.
These sales were all for cash.
Expenses during the year (all paid in cash) amounted to $110,000.
As a result of the above, which of the following is a correct statement?
A) The firm had an asset called 'accrued subscriptions receivable' at the end of the
year amounting to $120,000.
B) The firm's net cash flow (increase or decrease in the cash balance) was less than
its reported income (ignoring taxes) for the year.
C) The firm reported income (ignoring taxes) for the year in the amount of $70,000.
D) The firm recognized revenue for the year in the amount of $140,000.
E) The firm had a liability for undelivered periodicals at the end of the year
amounting to $200,000.
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