A retail store received cash and issued gift certificates that are redeemable in merchandise. The gift certificates lapse one year after they are issued. How would the deferred revenue account be affected by each of the following transactions?
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Redemption of certificates |
Lapse of certificates |
|
|
a. |
No effect |
Decrease |
|
b. |
Decrease |
Decrease |
|
c. |
Decrease |
No effect |
|
d. |
No effect |
No effect |