When making its year-end entries,the city's accountant determines that $20,000 of the city's remaining current property taxes receivable would not be collected within the first sixty days of the next fiscal year,but would be collectible later in that year.At year-end,the city should report a $20,000 credit to:
A)revenues - property taxes
B)property taxes receivable - delinquent
C)deferred revenues - property taxes
D)allowance for uncollectible taxes

Question

Quizplus · Accepted Answer

The $20,000 property taxes receivable will not be collected within the first sixty days of the next fiscal year, so it is considered deferred revenue - property taxes. This means it is revenue that will be earned in a future accounting period, so it is not yet recognized as revenue. Therefore, the city should report a $20,000 credit to deferred revenues - property taxes.

When Making Its Year-End Entries,the City's Accountant Determines That $20,000