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

Question

Quizplus · Accepted Answer

The correct adjusting entry for recognizing gym memberships that have been earned but were previously recorded as unearned (or deferred) revenue involves debiting (decreasing) the Unearned Gym Memberships liability account and crediting (increasing) the Gym Memberships Revenue account. This reflects the recognition of revenue as the service obligation is fulfilled.

The Adjusting Entry for Gym Memberships Earned That Were Previously