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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

In which column of the work sheet—Income Statement (IS) or Balance Sheet (BS)—would the adjusted balances of the following accounts appear?

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To determine

Indicate the column of worksheet–IS (income statement) or BS (balance sheet), in which the adjusted balances of given accounts are recorded.

Explanation

Worksheet: Worksheet is an accounting tool that help accountants to record adjustments and up-date balances required to prepare financial statements. Worksheet is a central place where trial balance, adjustments, adjusted trial balance, income statement, and balance sheet are presented.

Indicate the column of worksheet–IS (income statement) or BS (balance sheet), in which the adjusted balances of given accounts are recorded.

AccountColumnJustification
a.BSPrepaid Insurance is the cost incurred by a company in advance and would be treated as asset until the cost expires or the benefit is consumed. So, it is recorded on balance sheet.
b.ISWages Expense is the expense incurred but not paid. So, it requires adjustment and is recorded on income statement along with Wages Payable which is recorded on balance sheet.
c.BSWages Payable is the expense incurred but not yet paid. It is treated as liability until the expense is paid, and is recorded on balance sheet...

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