Concept:Subscription received in advance is unearned income, so it represents an obligation for the business.
Explanation:When a subscriber pays before the service or benefit is provided, the business has not yet earned that amount.
This creates a duty to provide the subscription service in the future.
Therefore, it is not an asset or surplus.
It is a liability because the business owes the subscriber the service or goods.
It will become income only when the service is actually delivered.
Answer:It is classified as a liability.