The Following Data Applies to the Next Two Questions

question 4

Multiple Choice

The following data applies to the next two questions.
•Northern University has a fiscal year end of June 30.
•In June 2015, tuition and fees of $1,200,000 was assessed for the summer term that runs from June 1, 2015 through August 31, 2015. $1,200,000 was collected on June 1, 2015.
-What is the journal entry on June 1 for Northern?

• A) Cash and Cash Equivalents 1,200,000 Operating Revenues-Student Tuition and Fees 400,000
• Deferred Revenues-Student Tuition and Fees 800,000
• B) Cash and Cash Equivalents 400,000 Cash and Cash Equivalents, Reserved 800,000
• Operating Revenues-Student Tuition and Fees 400,000
• Deferred Revenues-Student Tuition and Fees 800,000
• C) Cash and Cash Equivalents 1,200,000 Operating Revenues-Student Tuition and Fees 1,200,000
• D) Cash and Cash Equivalents 1,200,000 Deferred revenue 1,200,000

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Definitions:

Market Price

The current value at which a good or service can be bought or sold in a given market.

Short-Run Equilibrium

A state in which supply equals demand within a particular market, specifically under the assumption that some conditions (like input prices) are fixed in the short term.

Marginal Cost

The charge for the production of one more unit of a product or service.

Marginal Revenue

The enhanced earnings a firm receives from offloading an extra unit of a good or service.