Assume That a Magazine Publishing Company Collects $120 from a Customer

Multiple Choice

Assume that a magazine publishing company collects $120 from a customer for a 12-month subscription, but has not yet sent out any magazines when the accounting period ends. Under accrual accounting, at the time this money is collected, the books should reflect

A) A liability of $120 and a revenue of $120
B) Cash of $120 and an expense of $120
C) Nothing, since no magazines have yet been mailed
D) A liability of $120 and cash of $120