Phoenix Fitness Centers have 15,000 members whose monthly dues are $100 each. The company does not send individual bills to customers, who have until the 10th day of the month following the month of service to pay their monthly dues. On December 31 the company's records show that 7,000 customers have already paid their December dues, and the payments were properly recorded.
The adjusting entry to be recorded on December 31 will include:

Question

Quizplus · Accepted Answer

DC) The 8,000 members who haven't paid their dues for December represent $800,000 in revenue (8,000 members x $100 each) that hasn't been received yet, so Accounts Receivable should be increased by this amount to reflect the owed dues.D) The 7,000 members who have paid their December dues represent $700,000 in revenue (7,000 members x $100 each) that has been received and properly recorded, which does not require an adjusting entry for Accounts Receivable as it's already accounted for. However, the choice is incorrect in the context of the question's requirement for an adjusting entry, indicating a misunderstanding in my explanation. The correct focus should be on the unrecorded revenue and receivables, not on what has already been recorded.

Phoenix Fitness Centers Have 15,000 Members Whose Monthly Dues Are