ACCOUNTINGad in the headlines When does SurveyMonkey recognize revenue from its Platinum annual subscription plans? Survey Monkey is an online survey company that allows its subscribers to customize and administer surveys. It recently made the news for raising another $250 million in equity funding ("Survey Monkey is worth $2 billion after new $250 million fundraising round, Fortune, December 15, 2014.) (Note: Survey Monkey is privately held. The founder says the company will not go public because the related costs of being a publicly-held organization are too high.) Survey Monkey's basic services are free and include the ability to customize a survey containing a maximum 10 questions for up to 100 responses. Premium plans are also available through Survey Monkey. Features of the Platinum Survey Monkey plan include unlimited questions, unlimited number of responses, custom logos, and phone support. The Platinum plan costs $65 per month and is billed annually on the starting date of the plan for a total cost of $780. Questions 1. Assume that Black Squirrel Design, Inc., signs up for the Platinum plan at Survey Monkey on December 1, 2015. The customer pays the entire $780 on March 1. How will Survey Monkey record this customer's payment? What asset and/or liability accounts are affected? 2. Continue the same example from Item #1. If Survey Monkey has a December 31 year end, how much revenue related to the Platinum plan purchased by Black Squirrel Design will Survey Monkey recognize at December 31, 2015? How much revenue from the Black Squirrel Design purchase will be recognized during 2016? Page 1, Copyright 2014 by Dr. Wendy Tietz, http://accountingintheheadlines.com/ This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License