Question

An advance receipt of subscription from a member of the non profit organization is considered as a/an _______________.

• A. Expense
• B. Liability
• C. Equity
• D. Asset

Answer 1

The correct option is B Liability

Subscription is the amount that is paid by members of NPO every year. It is the primary source of income of NPO. It is generally paid every month. It is the amount paid by members to keep their membership alive. An advance receipt of subscription from a member is an income received in advance. So it is treated as liability.