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
