question 14 svensen massages monitors its revenues on a regular basis and tries to achieve revenues within a…

question 14 svensen massages monitors its revenues on a regular basis and tries to achieve revenues within a particular range each month. during december, total revenues were several thousand dollars less than desired at the end of the day on december 26. the sales manager suggested selling gift cards for massages during the last week of the month in order to meet the revenue targets. will this action help achieve revenue targets? why or why not? a yes. no extra costs will be incurred, causing net income to increase. b no. proceeds from the sale of gift cards increase accounts receivable, not revenue. c no. proceeds from the sale of gift cards increase unearned revenues. d yes. revenues will increase for the amount received from the sale of gift cards.

question 14 svensen massages monitors its revenues on a regular basis and tries to achieve revenues within a particular range each month. during december, total revenues were several thousand dollars less than desired at the end of the day on december 26. the sales manager suggested selling gift cards for massages during the last week of the month in order to meet the revenue targets. will this action help achieve revenue targets? why or why not? a yes. no extra costs will be incurred, causing net income to increase. b no. proceeds from the sale of gift cards increase accounts receivable, not revenue. c no. proceeds from the sale of gift cards increase unearned revenues. d yes. revenues will increase for the amount received from the sale of gift cards.

Answer

Brief Explanations:

When gift - cards are sold, the amount received is considered unearned revenue. Revenue is not recognized until the services (massages in this case) are provided. So selling gift - cards does not immediately increase revenue.

Answer:

C. No. Proceeds from the sale of gift cards increase unearned revenues.