‘Good Food for Less’ Restaurant sells discounted coupons to its customers that m
ID: 2333582 • Letter: #
Question
‘Good Food for Less’ Restaurant sells discounted coupons to its customers that may be used for meals. Its Unearned Revenue account had a balance of $5,000 at the beginning of the period, and during the current period, additional coupons were sold for $15,000. At the end of the period it was determined that $12,000 worth of coupons are still remaining to be used by customers. The appropriate adjusting entry for the restaurant at the end of the period would be:
Debit Unearned Revenue $12,000 and credit Meals Revenue $12,000.Explanation / Answer
Value of coupons used = 5000+15000-12000 = $8000 Debit Unearned Revenue $8,000 and credit Meals Revenue $8,000. Option 4 is correct
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