Question

Read each May 2020 scenario below and indicate if Jump Arena should recognize revenue, expense, or neither during May. Revenue Expense Neither a) Jump Arena made cash sales totaling $2,800 in May. b) Jump Arena paid $500 for an advertisement that appeared in The New York Times on May 20. c) On May 10, Jump Arena spent $2,500 cash to purchase new equipment. d) On May 2, Jump Arena sold trampolines totaling $900 to a customer who agreed to pay Jump Arena in June. e) Jump Arena received its May water bill and plans to pay the bill in June. f) On May 1, Jump Arena purchased $1,080 of office supplies. g) On May 3, Jump Arena hired a handyman to fix a broken trampoline. The handyman charged $410 and sent Jump Arena a bill. h) Jump Arena paid $1,300 for May rent. i) Jump Arena used $150 of office supplies during May. j) Jump Arena received a $400 pre-order from a customer for products to be delivered in August 2020. TOTALS 2 5 3

Answer 1

		Revenue	Expense	Neither
a)	Cash sales for $2800	Revenue
b)	Advertisement for $500		Expense
c)	New equipment purchase for $2500			Neither
d)	Trampolines sold to a customer	Revenue
e)	Water bill		Expense
f)	Office supplies			Neither
g)	Hnadyman charge		Expense
h)	Rent		Expense
i)	Office supplies used		Expense
j)	Pre order			Neither