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Covid-19 Impact on Airline Industry: Correct Accounting Entry for Cancelled Flights
South China Sea Airlines is one of the many airlines impacted by the Covid-19 pandemic. In February 2020, Mr & Mrs Zhang paid $9,000 to take their family back to Hong Kong and Macau in July 2020 for a holiday and to visit family. However, the flight was cancelled and instead of giving a refund to Mr & Mrs Zhang, South China Sea Airlines offered a voucher to take another flight once all airlines were free to fly to destinations outside of Australia. The Company recorded the transaction in February 2020 as Debit (DR): Cash $9,000 Credit (CR): Sales Revenue $9,000 Due to the Covid – 19 Restrictions, the correct entry should be. Group of answer choices Debit (DR): Sales Revenue $9,000 and Credit (CR): Cash $9,000 Debit (DR): Cash $9,000 and Credit (CR): Sales revenue payable $9,000 Debit (DR): Cash $9,000 and Credit (CR): Sales revenue received in advance $9,000 Debit (DR): Sales revenue received in advance $9,000 and Credit (CR): Cash $9,000 Flag question: Question 16

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