Wave Inn is a resort located in Canada. During December 2014 Spin Jammers held its annual conference at the resort. The charges related to the conference total $360,000, of which 25% has been paid by Spin Jammers. When Wave Inn makes the appropriate adjusting entry, which of the following is a part of the adjustment made to its December 31, 2014 statement of financial position?
A) Debit Cash $270,000.
B) Credit revenues $270,000.
C) Credit Cash $270,000.
D) Debit Cash and credit revenue $270,000.

Question

Quizplus · Accepted Answer

Wave Inn should recognize the revenue earned from the conference. Since 25% has been paid, 75% remains as accounts receivable, and the full amount should be credited to revenues.

Wave Inn Is a Resort Located in Canada