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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Place a check mark next to any account(s) requiring adjustment. Explain why those accounts must be adjusted.

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To determine

Indicate a check mark for the given accounts that require adjustments and explain the reason for adjusting entry.

Explanation

Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and owners’ or stockholders’ equity) to maintain the records according to accrual basis principle and matching concept.

Indicate a check mark for the given accounts that require adjustments and explain the reason for adjusting entry.

Check MarkAccount NameReason for adjusting this account
 a.No adjustment.
b.This is the expense paid by a company in advance and would be treated as asset until the cost expires or the benefit is consumed. Hence, prepaid expenses require adjustment at the end of the year.
 c...

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