An entity is a resort located in Palawan. The entity collects cash when guests make a reservation. During December 2020, the entity collected P600,000 of cash and recorded the receipt by recognizing unearned revenue. The entity had earned one-third of this amount and the other two-thirds will be earned during January 2021. What is the impact of the adjusting entry on December 31, 2020?
An entity is a resort located in Palawan. The entity collects cash when guests make a reservation. During December 2020, the entity collected P600,000 of cash and recorded the receipt by recognizing unearned revenue. The entity had earned one-third of this amount and the other two-thirds will be earned during January 2021. What is the impact of the adjusting entry on December 31, 2020?
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 7DQ
Related questions
Question
An entity is a resort located in Palawan. The entity collects cash when guests make a reservation. During December 2020, the entity collected P600,000 of cash and recorded the receipt by recognizing unearned revenue. The entity had earned one-third of this amount and the other two-thirds will be earned during January 2021. What is the impact of the
a. 400,000 increase in equity
b. 200,000 decrease in liability
c. 600,000 increase in asset
d. 200,000 decrease in equity
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning