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

When the company pays stockholders a dividend, what is the effect on the accounting equation for that company?

A) Decrease stockholders' equity and increase assets.

B) Increase liabilities and increase assets.

C) Decrease assets and decrease liabilities.

D) Decrease assets and decrease stockholders' equity.

Answer: D

Receiving cash from customers before services are performed results in:

A) Prepaid Assets.

B) Service Revenue.

C) Deferred Revenues.

D) Accounts Receivable.

Answer: C

Receiving cash from an account receivable:

A) Increases revenue and decreases an asset.

B) Decreases a liability and increases an asset.

C) Increases an asset and increases revenue.

D) Increases one asset and decreases another asset.

Answer: D