PrimeFlix sells one-year online subscriptions for viewing classic movies. Customers are required to pay for the subscription at the beginning of the subscription period. On April 1, 2021, total sales of one-year subscriptions are $12,000. What is the adjusted balance of Deferred Revenue on December 31, 2021?

A) $9,000.

B) $3,000.

C) $0.

D) $12,000.

Answer: B

On September 1, 2021, Gold Gaming sold 400 one-year subscriptions to its online gaming website for $90 each. The total amount received was credited to Deferred Revenue. What would be the required adjusting entry at December 31, 2021?

A) Debit Deferred Revenue and credit Service Revenue for $36,000.

B) Debit Service Revenue and credit Deferred Revenue for $24,000.

C) Debit Deferred Revenue and credit Service Revenue for $24,000.

D) Debit Deferred Revenue and credit Service Revenue for $12,000.

Answer: D

A) Accrual-basis revenues exceed cash collections from customers.

B) Accrual-basis expenses exceed cash collections from customers.

C) Accrual-basis revenues are less than cash collections from customers.

D) Accrual-basis net income is less than cash-basis net income.

Answer: A

A) Providing services to customers for cash.

B) Paying one year of rent in advance.

C) Paying salaries to employees.

D) Purchasing supplies on account.

Answer: D

A) Accrual-basis revenues exceed cash collections from borrowers.

B) Accrual-basis net income exceeds cash-basis net income.

C) Accrual-basis revenues are less than cash collections from borrowers.

D) Accrual-basis expenses are less than cash payments to borrowers.

Answer: C