The Maroon & Orange Gym,Inc

question 113

Multiple Choice

The Maroon & Orange Gym,Inc. ,uses the accrual method of accounting.The corporation sells memberships that entitle the member to use the facilities at any time.A one-year membership costs $480 ($480/12 = $40 per month) ;a two-year membership costs $720 ($720/24 = $30 per month) .Cash payment is required at the beginning of the membership period.On July 1,2015,the company sold a one-year membership and a two-year membership.The company should report as gross income from the two contracts:

• A)$1,200 in 2015.
• B)$960 in 2015.
• C)$180 in 2017.
• D)$780 in 2016.
• E)None of these.

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Definitions:

Terror Management Theory

A psychological theory suggesting that fear of death motivates humans to adopt cultural beliefs and behaviors that help to manage this fear.

Psychological Reactance Theory

A theory that suggests individuals have an innate response to resist threats to their freedom of choice or behavior, leading to a motivational state aimed at reasserting control.

Strong Attitudes

Deeply held beliefs that are resistant to change and have a significant influence on behavior.

Vested Interest

Having a personal stake or concern in an outcome that typically leads to biased decision-making.