Under the Alternative Method for Accounting for Unearned Revenue,which of the Following

question 72

Multiple Choice

Under the alternative method for accounting for unearned revenue,which of the following pairs of journal entry formats is correct?

• A) \[\begin{array} { | l | l | }
• \hline{ \text { Initial Entry } } & { \text { Adjusting Entry } } \\
• \hline \text { Cash } & \text { Unearned Consulting Revenue } \\
• \hline \text { Unearned Consulting Revenue } & \text { Consulting Revenue } \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \hline\text { Initial Entry } & \text { Adjusting Entry } \\
• \hline \text { Cash } & \text { Consulting Revenue } \\
• \hline \text { Consulting Revenue } & \text { Unearned Revenue } \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | }
• \hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \\
• \hline \text { Cash } & \text { Unearned Revenue } \\
• \hline \text { Unearned Revenue } & \text { Cash } \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | }
• \hline { \text { Initial Entry } } & { \text { Adjusting Entry } } \\
• \hline \text { Consulting Revenue } & \text { Unearned Revenue } \\
• \hline \text { Cash } & \text { Consulting Revenue } \\
• \hline
• \end{array}\]
• E) \[\begin{array} { | l | l | }
• \hline { \text { Initial Entry } } &{ \text { Adjusting Entry } } \\
• \hline \text { Cash } & \text { Consulting Revenue } \\
• \hline \text { Unearned Revenue } & \text { Unearned Reverue } \\
• \hline
• \end{array}\]

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Definitions:

Market Capitalization Rate

The expected return on an investment in a market portfolio, based on the market price of risk.

Constant-Growth DDM

A model for valuing a company's stock by using predicted dividends and discounting them back to present value assuming a constant growth rate.

Preferred Share

A class of ownership in a corporation with a higher claim on assets and earnings than common stock.

Dividend

A portion of a company's earnings that is paid to shareholders, typically on a quarterly basis.