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The adjusting entry for gym memberships earned that were previously recorded in the unearned gym memberships account is
A) debit Unearned Gym Memberships; credit Gym Memberships Revenue
B) debit Gym Memberships Revenue; credit Unearned Gym Memberships
C) debit Unearned Gym Memberships; credit Prepaid Gym Memberships
D) debit Gym Memberships Expense; credit Unearned Gym Memberships
Unearned Gym Memberships
Revenue received from gym memberships that have not yet been earned because the service has not been provided, recorded as a liability on the balance sheet.
Gym Memberships Revenue
Revenue generated from the sale of memberships or subscriptions to a fitness gym.
Prepaid Gym Memberships
Payments made in advance for gym services, representing a future expense for the gym that becomes realized as the service period elapses.
- Comprehend the recognition and adjustment of unearned revenues in financial statements.
- Analyze the influence of adjusting entries on the income statement and balance sheet.
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Learning Objectives
- Comprehend the recognition and adjustment of unearned revenues in financial statements.
- Analyze the influence of adjusting entries on the income statement and balance sheet.
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