3. A retail store received cashand issued gift certificates thatare redeemable inmerchandise. The giftcertificates lapse one yearafter they are issued. Howshould the deferred revenueaccount be affected by each ofthe following transactions? *a. Redemption of certificates - Noeffect; Lapse of certificates -Decreaseb. Redemption of certificates -Decrease; Lapse of certificates -Decreasec. Redemption of certificates -O Decrease; Lapse of certificates - Noeffectd. Redemption of certificates - NoO effect; Lapse of certificates - Noeffect

Solution: Gift ceryificates can be redeemed in one year only. Therefore if they are redeemed that…

3. A retail store received cash and issued gift certificates that are redeemable in merchandise. The gift certificates lapse one year after they are issued. How should the deferred revenue account be affected by each of the following transactions? *

3. A retail store received cash and issued gift certificates that are redeemable in merchandise. The gift certificates lapse one year after they are issued. How should the deferred revenue account be affected by each of the following transactions? *

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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