Use the Following Information for Questions 34-35

question 36

Multiple Choice

Use the following information for questions 34-35.
Malaya's Manicures sells $2,500 worth of gift certificates in November and December. 25% of the gift certificates are redeemed in December prior to the December 31 year end.
-The required year end adjusting entry is

• A) Dr. Revenues $625, Cr. Deferred Gift Card Revenues $625
• B) Dr. Revenues $1,875, Cr. Deferred Gift Card Revenues $1,875
• C) Dr. Deferred Gift Card Revenues $625, Cr. Revenues $625
• D) Dr. Gift Card Revenues $1,875, Cr. Revenues $1,875

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Definitions:

Tax Benefit

A reduction in tax liability, often received through deductions, credits, or other allowances.

Selling Price

The amount of money for which something is sold in the market.

Book Value

The net value of a company's assets minus its liabilities, often compared to the market value to assess if a stock is under or overvalued.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health and ability to meet short-term obligations.