Atlas Fitness gains a client who prepays $420 for a package of six physical training sessions. Atlas
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Question:
Atlas Fitness gains a client who prepays $420 for a package of six physical training sessions. Atlas Fitness collects the $420 in advance and will provide the training later. After four training sessions, what should Atlas Fitness report on its income statement assuming it uses the accrual basis accounting method?
A: Cash of $140
B: Service revenue of $420
C: Service revenue of $280
D: Unearned service revenue of $280
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