When a business sells a gift card, why is the amount recorded as a liability instead of

Question:

When a business sells a gift card, why is the amount recorded as a liability instead of revenue?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial Accounting A Critical Approach

ISBN: 978-1259066528

4th edition

Authors: John Friedlan

See More Books

Question Posted: Feb 26, 2015 11:42 AM

See More Questions

Why is the amount available from personal savings and Social Security retirement benefits even more important for women than for men?
When budgetary accounts are used, why is the amount for estimated revenues a debit instead of a credit?
Why is the amount of cost of goods manufactured different from the amount of cost of goods sold? Could there be a situation in which these amounts are equal? If so, explain.
Single PlantwideandMultiple Production Department Factory Overhead Rate Methodsand Product Cost Distortion The management of Nova Industries Inc. manufactures gasoline and diesel engines through two...
The owner of a company that sells job-management software to small construction and contracting businesses is thinking about the long-term implications of a possible price increase. The company sells...
Herr Foods, a producer of a variety of salty snacks, performs taste tests to compare how consumers react to its products. A product such as horseradish cheddar chips is considered a polarizing...
In fitting a least squares line to n = 20 data points, the following quantities were computed: SSxx = 60, SSyy = 225, SSxy = -75, x = 2.4, and y = 45. a. Find the least squares line. b. Graph the...
Dante's Protein Powder produces a dietary supplement. The standard cost of producing one unit is: Material (1.25 pounds $2.50) ..........................$ 3.13 Labor (1.2 hours $10)...
Cash Budget Wallace Inc. collects 85% of its sales on account in the month of the sale and 15% in the month following the sale. If sales on account are budgeted to be $21,000 for September and...
The Oceanic Pacific fleet has just decided to use a pole-and-line method of fishing instead of gill netting to catch tuna. The latter method involves the use of miles of nets strung out across the...
Why is it necessary to estimate many liabilities? Provide some examples of liabilities that must be estimated.
What is an accrued liability? What is a provision? Distinguish among an accrued liability, provision, and accounts payable? Under what circumstances are accrued liabilities and provisions required?
You are the controller for Pro Clean Services, a company that provides janitorial services to large commercial customers. The company has been very successful during its first two years of...
Gil and Ruth George have been friends of yours for many years. They have come to you for advice on their estate plan since they want a second opinion to make sure it is going to do what they hope....
The test statistic of z = 1.74 is obtained when testing the claim that p # 0.658. Identify the hypothesis test as being two-tailed, left-tailed, or right-tailed. Find the P-value. Using a...
Ann and Bob had their first date. Each either felt romantic chemistry (C) or no chemistry (NC) with the other person. Each person knows his/her own feeling but does not know the feeling of the other...
Find the following using countif, countifs, sumif, sumifs, averageif, and averageifs. Create all formulas and calculations directing in Excel. How many songs are sung by Moore? What is the average...
Total number of Ledgers, Groups, Entries etc. can be shown from o a. Tally Audit o b. Statistics o c. Accounts Information o d. Company Information
On January 1, 2011, Woodland Enterprises issued bonds with a face value of $\$ 50,000$, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on...
White Bolder Investments (WBI) You are an intern working for WBI, a large investment advisory services in Sydney. Among other regular customers, WBI has been providing advisory services for Jumbo...
ArcelorMittal S.A. is considering purchasing one of two mining machines for the upcoming year. The more expensive of the two is better and will produce a higher yield. Assume these investment...
a. Create a data flow diagram of the current system. b. Create a system flowchart of the existing system. c. Analyze the internal control weaknesses in the system. Model your response according to...
a. Create a data flow diagram of the current system. b. Create a system flowchart of the existing system. c. Analyze the internal control weaknesses in the system. Model your response according to...
a. Create a data flow diagram of the current system. b. Create a system flowchart of the existing system. c. Analyze the internal control weaknesses in the system. Model your response according to...
please help Problem 13-7 (Algo) Prepare a Statement of Cash Flows [LO13-1, LO13-2] [The following information applies to the questions displayed below.] Comparative financial statements for Weaver...
A firm has 1000 shareholders, each of whom own $59 in shares. The firm uses $28000 to repurchase shares. What percentage of the firm did each of the remaining shareholders own before the repurchase,...
Vancouver Bank agrees to lend $ 180,000 to Surrey Corp. on November 1, 2020 and the company signs a six-month, 6% note maturing on May 1, 2021. Surrey Corp. follows IFRS and has a December 31 fiscal...

When a business sells a gift card, why is the amount recorded as a liability instead of

Question:

Step by Step Answer:

Proceeds from gift card sales are recorded as liabilities b...View the full answer

Financial Accounting A Critical Approach

Students also viewed these Accounting questions