The general fund of the City of Atlanta received a check for $10,000 from an Atlanta resident on July 1,20X8.Of the amount received,$4,800 represented full payment of property taxes for 20X8,and the remaining $5,200 represented an advance payment for property taxes of 20X9.On July 1,20X8,the general fund should record the receipt by debiting Cash for $10,000 and by crediting
A)Revenue-Property Tax for $10,000.
B)Property Taxes Receivable-Current for $4,800 and Deferred Revenue for $5,200.
C)Revenue-Property Tax for $4,800 and Deferred Revenue for $5,200.
D)Property Taxes Receivable-Current for $4,800 and Revenue-Property Tax for $5,200.

Question

Quizplus · Accepted Answer

The general fund should record the receipt by debiting Cash for $10,000 and by crediting Property Taxes Receivable-Current for $4,800 and Deferred Revenue for $5,200. The $4,800 payment for 20X8 property taxes is recorded as a receivable because it is not yet earned. The $5,200 advance payment for 20X9 property taxes is recorded as deferred revenue because it is not yet earned.

The General Fund of the City of Atlanta Received a Check