Certossi's Spa sells gift certificates for future services. These gift certificate sales should be recorded as
A) a credit to sales revenue.
B) a credit to cash.
C) a debit to sales revenue.
D) a credit to unearned revenue.

Question

Quizplus · Accepted Answer

Gift certificate sales represent a liability for the company until the services are actually provided, therefore these transactions should be recorded as a credit to unearned revenue.

Certossi's Spa Sells Gift Certificates for Future Services