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Which statements best describes the nature of gift card sale

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Problem 1: Comfy Home sells gift cards which can be loaded with any amount greater than $10, in increments of $5. Which of the following statements best describes the nature of gift card sales?

Option 1: Gift cards represent an asset because the company is entitled to receive revenues from future sales that will be paid for with gift cards.

Option 2: Gift cards represent an asset because the company will get to keep the cash from all gift cards that expire before they are redeemed.

Option 3: Gift cards represent a liability because the company has an obligation to provide goods to customers at a future date.

Option 4: Gift cards represent owners' equity because the company can recognize revenue as soon as the gift cards are sold

Reference no: EM132837106

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