The following information applies to the next three questions:
Tuition and fees for the Northern University was assessed at $22,000,000. Scholarship allowances, for which no services are required, were $1,600,000 and graduate assistantships, for which services are required, were $1,000,000.
-What is the journal entry to record the graduate assistantships?
A) Not recorded because it was deducted from tuition revenue before revenue it was recorded
B) Assistantships and Fellowships Expense 1,000,000 Accounts receivable 1,000,000
C) Operating Revenue Deduction -Scholarship Allowances 1,000,000
Accounts Receivable 1,000,000
D) Operating Revenue Deduction -Scholarship Allowances 1,000,000
Deferred Revenues 1,000,000

Question

Quizplus · Accepted Answer

The journal entry to record graduate assistantships should be a debit to Assistantships and Fellowships Expense for $1,000,000 and a credit to Accounts Receivable for $1,000,000.

Answer: A
 The graduate assistantships were already deducted from the tuition revenue and therefore, do not need a separate journal entry.

Answer: D
 This journal entry does not properly record the graduate assistantships. It records the scholarship allowances being deducted from operating revenue, but deferred revenue is not the appropriate account to credit for the assistantships. The correct account to credit is Accounts Receivable.

The Following Information Applies to the Next Three Questions