What is the adjusting entry for recording advance payments for memberships that have been earned during a period?
What if the advance payments for memberships had been entered as revenues when received? What would be the effect on earnings in the month when the fees were received, and why would that be potentially misleading to the company's managers?
Under the accrual system, what would be the effect on revenues and owners' equity if adjustments are not made for Silver's Gym memberships that were paid in advance?
Which principle of accounting requires an unearned revenue account to be credited when cash is received for memberships at Silver's Gym?