Question

During 2018 The Gap sold $198m in Gift Cards. The entry The GAP would record for...

During 2018 The Gap sold $198m in Gift Cards. The entry The GAP would record for the sale of the gift cards is:

Group of answer choices

DR Cash $198m; CR Unearned Revenue$198m

DR Cash $198m; CR Revenue $198m

DR Unearned Revenue $198m; CR Cash $198m

DR Revenue $198m; CR Cash $198m

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans: ( A) DR Cash $198m; CR Unearned Revenue$198m

Explanation:

1) Gift certificates (and gift cards) are often sold by a retailer to a buyer for cash.

2) These cards or certificates than are redeem by buyer for purchases.

3) When gift cards are sold entry should be:

Date Account Name Debit Credit
2018 Cash $198 m
To unearned revenue $198m

4) Cash comes in so it is debited, but it does not increse sales but liability , therfore unearned revenue account is credited.

5) Note that revenue is not recorded at this point. Rather, the retailer is recording its liability to provide merchandise or services for the amount of the cards in the future.

6) Hence only option ( a) is correct.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The journal entry required in 2018 to reflect the cash collection on customer accounts for goods...
The journal entry required in 2018 to reflect the cash collection on customer accounts for goods sold in 2017 on credit (on account), would be: Group of answer choices a) DR Accounts receivable and CR Cash b)DR Cash and CR Sales revenue c) DR Cash and CR Accounts receivable d) DR Sales revenue and CR Cash
During February 2020, Bonita Massage Ltd. sells $8,000 of gift cards for Valentine’s Day gifts. From...
During February 2020, Bonita Massage Ltd. sells $8,000 of gift cards for Valentine’s Day gifts. From reliable past experience, management estimates that 10% of the gift cards sold will not be redeemed. By the end of February, $5,600 was redeemed by customers. Prepare the journal entries for Bonita Massage for February 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and...
Robin Corporation begins the year with a balance of $300,000 in unearned revenue related to unredeemed...
Robin Corporation begins the year with a balance of $300,000 in unearned revenue related to unredeemed gift cards. During the year, $800,000 in gift cards expiring in 18 months are sold, of which $600,000 worth of gift cards have been redeemed in the same year. Another $50,000 in gift cards expired during the year and was transferred to revenue. Which of the following is the amount of revenue Robin earned from gift cards during the period? Group of answer choices...
Exercise 8-11A Record gift card transactions (LO8-4) Vail is one of the largest ski resorts in...
Exercise 8-11A Record gift card transactions (LO8-4) Vail is one of the largest ski resorts in the United States. Suppose that on October 1, 2021, Vail sells gift cards (lift passes) for $100,000. The gift cards are redeemable for one day of skiing during the upcoming winter season. The gift cards expire on April 1, 2022. Customers redeem gift cards of $20,000 in December, $30,000 in January, $25,000 in February, and $15,000 in March. 1. Record the sale of gift...
Bonds with a face amount $1,000,000, are sold at 109. The entry to record the issuance...
Bonds with a face amount $1,000,000, are sold at 109. The entry to record the issuance is Group of answer choices Debit: Cash 1,000,000 Debit: Premium on Bonds Payable 90,000 Credit: Bonds Payable 1,090,000 Debit Cash 1,090,000 Credit: Bonds Payable 1,090,000 Debit: Cash 1,060,000 Credit: Premium on Bonds Payable 60,000 Credit: Bonds Payable 1,000,000 Debit: Cash 1,090,000 Credit: Premium on Bonds Payable 90,000 Credit: Bonds Payable 1,000,000
Cricket Corporation recorded the material purchase of $1 million of equipment with the following journal entry:...
Cricket Corporation recorded the material purchase of $1 million of equipment with the following journal entry:                                          Equipment Expense                              1,000,000                                               Cash                                                         1,000,000 After the books are closed, what is the proper journal entry to correct the mistake when discovered in the subsequent year? Ignore the impact on depreciation in either year. Group of answer choices Either of these entries would result in corrected account balances. Dr Cash 1,000,000 and Cr Equipment Expense Dr Equipment 1,000,000 and Cr Retained Earnings...
Which Entry Line Below, would be included in the Adjusting Journal Entry at Month End to...
Which Entry Line Below, would be included in the Adjusting Journal Entry at Month End to record the Following Information; Supplies Purchased During the Month for Cash = $1,000 Supplies Counted at the End of the Month = $300 Group of answer choices Credit to Supplies for $1,000 Credit to Cash for $700 Credit to Supplies Expense for $700 Debit to Supplies for $300 None of These Choices Debit to Cash $700 Debit to Supplies Expense for $300
Prepare the adjusting entry to record cost of goods sold (under FIFO) for 2018 and adjust...
Prepare the adjusting entry to record cost of goods sold (under FIFO) for 2018 and adjust the inventory account to its year-end balance. How to do the entry on the periodic approach ?? is it correct to say Cost of Good Sold      2,738,545 Purchese 2,738,545. ????? or inventory ???
Bavarian Bar and Grill opened for business in November 2021. During its first two months of...
Bavarian Bar and Grill opened for business in November 2021. During its first two months of operation, the restaurant sold gift cards in various amounts totaling $7,200, mostly as Christmas presents. They are redeemable for meals within two years of the purchase date, although experience within the industry indicates that 80% of gift cards are redeemed within one year. Gift cards totaling $2,300 were presented for redemption during 2021 for meals having a total price of $2,700. The sales tax...
On March 1, 1995, Sonic Inc. sold merchandise to a customer, Chao Corp. and received a...
On March 1, 1995, Sonic Inc. sold merchandise to a customer, Chao Corp. and received a $60,000 (face value amount), two-year, non-interest bearing note. The market rate of interest is 11%. The annual reporting period ends August 31 and Sonic Inc. uses the periodic inventory system. Chao Corp. paid the note in full on its maturity date. The following transactions occurred as a result: i. Entry of sale of merchandise and acquisition of non-interest-bearing note. ii. An adjusting entry for...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT