medium · Investment Banking
A company receives $12,000 in January for a 12 month software subscription.
In February, what is the impact on the Income Statement and the Balance Sheet?
- Cash increases by $1,000 and Accounts Receivable increases by $1,000.
- No impact occurs until the end of the year when the contract is finished.
- Revenue increases by $1,000 and Deferred Revenue decreases by $1,000.
- Revenue increases by $12,000 and Cash increases by $12,000.
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