Topic: Membership Dues Better Community, a new local not-for-profit entity, has been recently formed. The organizers of the entity have formalized operations in such a way that they will charge membership dues, but will not provide any specific services in exchange for the dues. In discussion with a local accountant, who is also a new member of the not-for-profit entity, the conclusion is reached that the dues will be recognized as contributions and recorded as revenue in the year received rather than over the period of membership. In a review of the entity's operations, you find that additional services, such as seminars and group insurance, are provided by the entity. However, members are charged an additional cost for the aforementioned services. Because of this new information, you decide to investigate whether Better Community's recording of membership dues is appropriate. Required: Utilize the FASB's Codification to determine the appropriate accounting treatment for membership dues. What specific Codification references support your conclusion?

Topic: Membership Dues Better Community, a new local not-for-profit entity, has been recently formed. The organizers of the entity have formalized operations in such a way that they will charge membership dues, but will not provide any specific services in exchange for the dues. In discussion with a local accountant, who is also a new member of the not-for-profit entity, the conclusion is reached that the dues will be recognized as contributions and recorded as revenue in the year received rather than over the period of membership. In a review of the entity's operations, you find that additional services, such as seminars and group insurance, are provided by the entity. However, members are charged an additional cost for the aforementioned services. Because of this new information, you decide to investigate whether Better Community's recording of membership dues is appropriate. Required: Utilize the FASB's Codification to determine the appropriate accounting treatment for membership dues. What specific Codification references support your conclusion?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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