Campus Computers sells computers and provides internet access to students.The average computer system purchased is $2,500, and for an additional $100, students get wireless access on campus for the year.Wireless access purchased alone costs $180.At the time of sale of a computer with internet access, how much unearned revenue should Campus Computers recognize?

Question

Quizplus · Accepted Answer

Campus Computers should recognize $100 of unearned revenue at the time of sale, as this is the additional cost for wireless access for students who purchase a computer. The $2,500 for the computer system and $80 ($180 - $100) for the wireless access alone are considered earned revenue, as they have been fully paid for and the services have been provided or will be provided over time.

Campus Computers Sells Computers and Provides Internet Access to Students