Response to the following problem:
Suppose you start up your own photography business to shoot videos at college parties. The freshman class pays you $300 in advance just to guarantee your services for its party. The sophomore class promises you a minimum of $250 for filming its formal, and you end up collecting cash of $350 for this party.
Answer the following questions about the correct way to account for your revenue under the accrual basis.
1. In addition to cash, what type of account was created when you received $300 from the freshman class? Name the new account.
2. When did you earn your revenue for both parties? What actually caused you to earn the revenue? Did you earn the revenue at the moment you received cash?