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WAEC Financial Accounting 1995 Question 7

Question 7

Not-for-Profit Organisations

Subscription in advance is an example of

  1. A.prepayment
  2. B.accrual
  3. C.debtors
  4. D.provision
  5. E.reserves
Show the answer and explanation

Answer: B (accrual)

Explanation

Subscriptions paid in advance are owed to members as future services, a current liability; of the options, accrual (a liability) fits best.