Sally's Choice Sells Season Memberships for $200 Each

question 105

Multiple Choice

Sally's Choice sells season memberships for $200 each.During January of 2016, 60 season memberships were sold.As of March 31, 2016, only $3,000 of season membership fees had been collected from customers.The season runs for 4 months starting May 15, 2016.Which one of the following is an amount reported on the financial statements for the period ending March 31, 2016?

• A) Unearned membership revenue of $3,000
• B) Unearned membership revenue of $9,000
• C) Accounts receivable of $3,000
• D) Membership revenue of $9,000

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Definitions:

Short 100 Shares

Short 100 Shares refers to the investment strategy where an investor borrows 100 shares of a stock with the aim of selling them with the expectation that their price will decline.

Repurchase

The action of a company buying back its own shares from the marketplace, reducing the amount of outstanding stock.

Initial Investment

The original sum of money or capital used to purchase assets or start an investment portfolio at the outset.

Short 150 Shares

The action of borrowing 150 shares of a stock with the aim of selling them in the hope that the stock price will decline, allowing for profit upon repurchasing the shares at a lower price.