Meadville Industries Sells Gift Certificates That Are Redeemable in Merchandise

question 55

Multiple Choice

Meadville Industries sells gift certificates that are redeemable in merchandise. During 2017, Meadville sold gift certificates for $88,000. Merchandise with the total price of $52,000 was redeemed during the year. For Meadville, the cost of the merchandise sold was $32,000. Meadville sold gift certificates for the first time in 2017. The journal entry recording the sale of the gift certificates will include:

• A)a debit to Certificate Liability for $88,000
• B)a debit to Unearned Revenue for $88,000
• C)a credit to Sales for $88,000
• D)a credit to Unearned Revenue for $88,000

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Definitions:

Schizophrenia

A mental disorder characterized by distorted thinking, perceptions, emotions, and a sense of self.

Somatoform

Disorders characterized by physical symptoms that suggest illness or injury, but which cannot be fully explained by a general medical condition.

Bodily Ailment

Refers to any physical illness, disorder, or condition affecting the body.

Physical Cause

An underlying bodily reason for a symptom or phenomenon, often contrasted with psychological explanations.