Alpine Expeditions operates a mountain climbing school in Colorado. Some clients pay in advance for services; others are billed after services have been performed. Advance payments are credited to an account entitled Unearned Client Revenue. Adjusting entries are performed on a monthly basis. An unadjusted trial balance dated December 31, 2011, follows. (Bear in mind that adjusting entries have already been made for the first 11 months of 2011, but not for December.)

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You have to do an adjusting entry to move the unearned client revenue to earned client revenue the amount of revenues that was prepaid that was earned in December. There is not enough information provided for me to determine the amount earned in Dec. In the problem it should tell you the amount earned or a way to calculate the amount earned.


An adjusting entry will always affect one balance sheet account and one income statement account.