On January 1, 2016, Fitness and Racquet Club received a check from a member for $2,160, which represents dues for the next 18 months.

What effect will Fitness and Racquet Club's adjusting journal entry at the end of the accounting period on December 31, 2016 have on their accounting equation?

Question 1 options:

A)

Increase Assets by $1,440

B)

Increase Liabilities by $1,440

C)

Decrease Liabilities by $1,440

D)

Decrease Assets by $1,440