Chapter 6 Journal Entries

Question 1

Sale of Goods/Services (on credit)

Answer 1

Dr. Accounts Receivable (or Cash)
Cr. Sales Revenue

Question 2

Service Revenue (Service Performed)

Answer 2

Dr. Accounts Receivable (or Cash)
Cr. Service Revenue

Question 3

Long-Term Contracts (Percentage of Completion)

Answer 3

Dr. Accounts Receivable
Cr. Revenue from Long-Term Contract

Question 4

Installment Sale

Answer 4

Dr. Installment Accounts Receivable
Cr. Sales Revenue
Dr. Cash (upon collection)
Cr. Installment Accounts Receivable

Question 5

Subscription Revenue

Answer 5

Dr. Cash (or Accounts Receivable)
Cr. Unearned Revenue

Dr. Unearned Revenue
Cr. Subscription Revenue

Question 6

Sales with Return Rights (Refund Liability)

Answer 6

Dr. Accounts Receivable (or Cash)
Cr. Sales Revenue
Cr. Refund Liability

Dr. Refund Liability
Cr. Accounts Receivable (or Cash

Question 7

Gift Cards/Vouchers

Answer 7

Dr. Cash
Cr. Unearned Revenue

Dr. Unearned Revenue
Cr. Sales Revenue

Question 9

Extended Warranty Revenue

Answer 9

Dr. Cash (or Accounts Receivable)
Cr. Sales Revenue
Cr. Unearned Warranty Revenue

Dr. Unearned Warranty Revenue
Cr. Warranty Revenue

Question 10

Discounts/Allowances After Sale

Answer 10

Dr. Sales Revenue (or Sales Discounts)
Cr. Accounts Receivable