Question

We have learned about four types of adjustments: (1) prepaid expenses, (2) unearned revenues, (3) accrued expenses, and (4) accrued revenues. Select one specific adjusting entry that falls under one of the four types and post the following: 1. A description of the adjustment and why it is necessary. 2. Provide an example of the transaction; include the debit and credit, with dates and amounts. In order to receive full credit for your post you must reply to another students post. Discuss the status of the accounts affected prior to the adjustment (understated or overstated), and explain the impact of the adjustment on the financial statements.

Answer 1

1. If total on trail balance are not equal , by how much is one column higher than other ? $0 .

Above statment is false as if the trail balance is not equal that means we have missed some ledger balance to be incorporate or any mistake happen during posting of ledger so we cannot measures the exact difference .

2. A purchase of supplies on account for was credited to Supplies for $3,540 and credited to accounts accounts payable .

Above statement is incorrect ..as journal entry there is debit and credit we cannot credit the both of accounts .

Correct entry would

Supplies A/c Dr . $3,540

Accounts payable A/c Cr $3,540