Disco World Began Its Business on November 1 and Sold

question 197

Multiple Choice

Disco World began its business on November 1 and sold contracts to twelve students for dance lessons that day.The lessons cost $375 per person for a three-month period and the students are required to pay in advance. Assuming Disco World adjusts its accounts only at its December 31 year-end,what entry must Disco World make to account for the services provided through that date?

• A)Debit Cash and credit Dance Lessons Revenue for $3,000.
• B)Debit Deferred Revenue and credit Dance Lessons Revenue for $4,500.
• C)Debit Deferred Revenue and credit Dance Lessons Revenue for $3,000.
• D)Debit Dance Lessons Revenue and credit Deferred Revenue for $3,000.

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Definitions:

Consumers

Individuals or groups who are the final users of products and services produced within an economic system.

Web Portal

An Internet site whose purpose is to be a major starting point for users when they connect to the web.

Supply Chain

The network of all the individuals, organizations, resources, activities, and technology involved in the creation and sale of a product, from the delivery of raw material from the supplier to the final delivery to the end customer.

Retailer

A business or person that sells goods to consumers as opposed to wholesalers or suppliers.