During the Last Month of Its Fiscal Year, Echo Lake

question 140

Multiple Choice

During the last month of its fiscal year, Echo Lake Resort accepted numerous deposits from customers. By the end of the month many, but not all, of these guests had completed their stays. The entry to record this event is an example of an adjusting entry:

• A) To apportion a recorded cost.
• B) To apportion unearned revenue.
• C) To record unrecorded expenses.
• D) To record unearned revenue.

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Definitions:

Contracted

Entered into a formal and legally binding agreement between two or more parties outlining specific obligations.

Anticipatory Repudiation

A declaration by one party to a contract of their intention not to perform their future obligations as agreed, allowing the other party to treat the contract as breached and seek remedies.

Mutual Agreement

A mutual agreement is an understanding or arrangement made between two or more parties, usually detailed in a formal contract.

Discharge

The release or termination of a person’s duty, debt, or obligation, effectively relieving them from responsibility.