A Company Received $5,000 for 100 One-Year Subscriptions on July

question 7

Multiple Choice

A company received $5,000 for 100 one-year subscriptions on July 1.The journal entry to record this cash receipt would include a ________.The company uses a liability account for revenue received in advance.

• A) credit to Accounts Payable for $5,000
• B) debit to Prepaid Expenses for $5,000
• C) credit to Unearned Revenue for $5,000
• D) debit to Note Payable for $5,000

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Definitions:

Investment Turnover

A measure of how efficiently an entity is using its investments to generate sales, typically calculated as sales divided by the average investment.

Return On Investment

A financial metric employed for assessing the profitability of an investment, calculated by dividing the investment's net profit by its initial cost.

Direct Operating Expenses

Costs that are directly associated with the operation of a business, such as wages and raw materials.

Revenues

The total income received by a company from its business activities, typically from the sale of goods and services before any expenses are deducted.