The following information applies to the next three questions:
Tuition and fees for the Northern University was assessed at $21,000,000. Scholarship allowances, for which no services are required, were $1,700,000 and graduate assistantships, for which services are required, were $900,000.
-What is the journal entry to record the scholarship allowances?
A) Not recorded because it was deducted from tuition revenue before revenue it was recorded

Question

The following information applies to the next three questions:
Tuition and fees for the Northern University was assessed at $21,000,000. Scholarship allowances, for which no services are required, were $1,700,000 and graduate assistantships, for which services are required, were $900,000.
-What is the journal entry to record the scholarship allowances? 
A) Not recorded because it was deducted from tuition revenue before revenue it was recorded

Quizplus · Accepted Answer

Scholarship allowances are a reduction of revenue and should be recorded as such. Therefore, the journal entry would be a debit to scholarship allowance expense and a credit to tuition revenue.

The Following Information Applies to the Next Three Questions