Mercury Company Sells Tickets in Advance for Its Weekly Productions

question 159

Multiple Choice

Mercury Company sells tickets in advance for its weekly productions and records the proceeds as Unearned Revenue.At the end of each month,the company makes an adjusting entry to account for the tickets used during the month (ticket revenue.) On March 1,the Unearned Revenue account had a credit balance of $5,000.During March,Mercury sold 500 tickets at $40 each,and 450 tickets were used during the month.What is the balance in Unearned Revenue at the end of March?

• A) credit balance of $7,000
• B) debit balance of $5,000
• C) credit balance of $5,000
• D) debit balance of $7,000

---

Definitions:

Premium

The amount paid for an insurance policy or the cost above the nominal value of something.

Surety

A person or entity that assumes responsibility for another's performance of an obligation, such as the repayment of a loan or the fulfillment of a contract.

Suretyship Relationship

is a legal arrangement where a surety guarantees the performance of a debtor's obligation to a creditor, assuming liability if the debtor fails to fulfill the contractual obligation.

Principal Debtor

The main individual or entity responsible for repaying a debt or obligation.