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WAEC Financial Accounting 2009 Question 4

Question 4

Not-for-Profit Organisations

Subscriptions prepaid by members is recorded in the Balance Sheet of a club as a

  1. A.current liability
  2. B.current asset
  3. C.fixed asset
  4. D.long term liability
Show the answer and explanation

Answer: A (current liability)

Explanation

Subscriptions paid in advance belong to next year; the club owes members that service, so it is a current liability.