Use the information to answer this question Receipts and Payment Account (Extract) N Bal b/f 3650 Insurance 900 subscription (99) 7500 Rate 11,700 (2000) 1000 Bal c/d 8,050 Fees 8500 20,650 20,650 The following information were given:
Rates owing Insurance prepaid Subscription in arrears 1/199 3,600 50 700 31/12/99 2000 1000 600
The figure ₦1000 represent what in the balance sheet.
  • A Assets
  • B Liability
  • C capital
  • D Subscription
jamb 2019accounting

The correct answer is B. Liability

The ₦1000 represent liability in the balance sheet, since it is paid by the members representing dues for next year. Subscription in advance are liabilities, because the company that received the money has not yet earned it and it has an obligation (a liability) to deliver the related goods or services in the future.

Previous question Next question