Subscription received in advance during the current year is treated as?

Question: Subscription received in advance during the current year is treated as?

Subscription received in advance during the current year is typically treated as a liability on the company's balance sheet until the goods or services related to the subscription are provided to the customer.

For example, if a company receives a subscription payment from a customer for a service that will be provided over the next 12 months, the company would record the payment as a liability and recognize it as revenue over the 12-month period as the service is provided. This is because the company has not yet fulfilled its obligation to provide the service to the customer, so the payment is considered to be received in advance.

The accounting treatment of subscription received in advance may vary depending on the specific circumstances, so it's always best to consult with an accountant or financial professional for guidance on how to properly account for this type of transaction.

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