The following accounts were taken from the unadjusted trial balance of Orion Co., a congressional lobbying firm. Indicate whether or not each account would normally require an adjusting entry. If the account normally requires an adjusting entry, indicate the type of adjustment Supplies Normally requires adjustment Does not normally require adjustment Accrued Expense Accrued Revenue Prepaid Expense Unearned Revenue Type None-Account does not require adjustment

The following accounts were taken from the unadjusted trial balance of Orion Co., a congressional lobbying firm. Indicate whether or not each account would normally require an adjusting entry. If the account normally requires an adjusting entry, indicate the type of adjustment Supplies Normally requires adjustment Does not normally require adjustment Accrued Expense Accrued Revenue Prepaid Expense Unearned Revenue Type None-Account does not require adjustment

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter4: Income Measurement And Accrual Accounting

Section: Chapter Questions

Problem 4.23E: The Effect of Ignoring Adjusting Entries on Net Income For each of the following independent...

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The Effect of Ignoring Adjusting Entries on Net Income For each of the following independent situations, determine whether the effect of ignoring the required adjusting entry will result in an understatement (U), will result in an overstatement (O), or will have no effect (NE) on net income for the period.
Describe the effect on the financial statements when an adjustment is prepared that records (a) unrecorded revenue and (b) unrecorded expense.
Classifying adjusting entriesThe following accounts were taken from the unadjusted trial balance ofMurray Co., a congressional lobbying firm. Indicate whether or not eachaccount would normally require an adjusting entry. If the accountnormally requires an adjusting entry, use the following notation to indicate the type of adjustment:AE-Accrued ExpenseAR-Accrued Revenue PE-Prepaid ExpenseUR-Unearned RevenueTo illustrate, the answer for the first account follows: Account Answer Accounts Receivable Normally requires adjustment (AR). Buildings Cash Common Stock Interest Receivable Land Prepaid Rent Salaries Payable Supplies Unearned Fees Wages Expense
, Which of the following adjusting entries cannot be reversed? a. An adjusting entry to accrue an expense b. An adjusting entry to accrue an income c. An adjusting entry to record the expired portion of a prepayment of an item of expense d. An adjusting entry to record the unearned portion of an advanced collection of an item of income
Classifying Adjusting Entries The following accounts were taken from the unadjusted trial balance of Legislative Results Inc., a congressional lobbying firm. Indicate whether or not each account would normally require an adjusting entry. If the account normally requires an adjusting entry, use the following notation to indicate the type of adjustment: AR—Accrued Revenue AE—Accrued Expense UR—Unearned Revenue PE—Prepaid Expense To illustrate, the answer for the first account follows: Account Answer Accounts Receivable Normally requires adjustment (AR). Cash Harriet Kasun, Capital Interest Expense Interest Receivable Land Office Equipment Prepaid Rent Supplies Unearned Fees Wages Expense
CHOOSE FROM THE FOLLOWING ACCOUNTS FOR THE CORRECT ACCOUNT OF ADJUSTING ENTRIES: deferred revenue sales
Failure to prepare an adjusting entry at the end of the period to record an accured expense would casue: (Choose all of the correct ones) A. An understatement of libailities B. An overstatement of revenue C. An understatement of expenses D. An overstatement of net income E. An overstatement of assets
In recording adjusting entries, Reagan Financial Advisors failed to record the adjusting entries for the following situations: (Click to view the adjusting entries.) Determine the effects on the income statement and balance sheet by identifying whether assets, liabilities, equity, revenue, and expenses are either overstated or understated. Use the following table. Adjustment a has been provided as an example. (Leave unused input fields blank.) Adjustment Not Recorded Adjustment not recorded (a) Adjustment not recorded (b) Adjustment not recorded (c) Adjustment not recorded (d) Adjustment not recorded (e) Assets Overstated Balance Sheet Liabilities Equity Overstated Income Statement Revenue Expenses Understated More info a. Office supplies on hand, $100. b. Accrued revenues, $5,000. C. Accrued interest expense, $250. d. Depreciation, $800. e. Unearned revenue that has been earned, $550. Print Done X
What is the major difference between the unadjusted trial balance and the adjusted trial balance? The adjusted trial balance includes the postings of the adjustments for the period in the balance of the accounts. Unlike the adjusted trial balance, the unadjusted trial balance will continue with the end-of-period processing even if it is not in balance. The adjusted trial balance will be used to record the adjustments for the period. The adjusted trial balance will show the net income (loss) as an additional account.
Please explain what an Unearned Revenue account is and why an adjustment may be necessary for Unearned Revenue. Please provide an example of an adjusting entry for Unearned Revenue.
Describe the appropriate adjusting entry for prepaid expenses and for deferred revenues. What is the effect on net income, assets, liabilities and shareholders equity of not recording a required adjusting entry for prepayments?
Which of the following is true about adjusting entries? Multiple Choice Entries are necessary due to the conservatism principle. They zero the balance of all income statement accounts. They are a necessary part of accrual-basis accounting. Entries can be done at the beginning or end of the accounting period.