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If a company has advance ticket sales totaling $2,000,000 for the upcoming football season, the receipt of cash would be journalized as:
a. Debit Unearned Revenue, credit Cash.
b. Debit Cash, credit Ticket sales payable.
c. Debit Cash, credit Unearned Revenue.
d. Debit Unearned Revenue, credit Sales.

Respuesta :

Answer:

c. Debit Cash, credit Unearned Revenue.

Explanation:

The journal entry is shown below:

Cash A/c Dr $2,000,000

     To  Unearned Revenue A/c $2,000,000

(Being advance cash is received)

For selling the advance tickets, we debited the cash account as cash is received and credited the unearned revenue because the service is not performed. It is recorded as a liability

Hence, the most appropriate option is c.

Therefore, all other options are wrong

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