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A New Sales Representative, Jiggs Lucero, Has Just Received His

Question 258

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A new sales representative, Jiggs Lucero, has just received his copy of the month-end financial reports. He is puzzled by the term "unearned revenue." He left the following e-mail message for you on the company's bulletin board system:
What is this??? Creative Accounting, or what??? Line item 12 on year-to-date financials shows over $25Gs in Unearned Revenue!!! Come on, guys! Either we earned it, or we didn't ... Right??! Is this how you guys lower our commissions? Reply to j.lucero@sbd
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