In December 2020, Quebecor Printing received magazine subscriptions for 2021 from customers, who paid $500 in cash

In December 2020, Quebecor Printing received magazine subscriptions for 2021 from customers, who paid $500 in cash. What would be the appropriate journal entry for this event in December 2020?

A) Debit Cash, $500 credit Subscription Revenue, $500.

B) Debit Cash, $500 credit Deferred Revenue, $500.

C) Debit Subscription Revenue, $500 credit Cash, $500.

D) No journal entry is necessary.

Answer: B

In January 2021, Summit Department Store sells a gift card for $50 and receives cash. In February, 2021, the customer comes back and spends $20 of the gift card to purchase a water bottle. What would be the appropriate journal entry for the sale of the gift card in January?

A) Debit Cash, $50 credit Sales Revenue, $50.

B) Debit Cash, $50 credit Deferred Revenue, $50.

C) Debit Sales Revenue, $20 credit Cash, $20.

D) No journal entry is necessary.

Answer: B

Deferred Revenues is a(n):

A) Liability account.

B) Asset account.

C) Stockholders' equity account.

D) Revenue account.

Answer: A