Week 3 CheckPoint-Adjustments and Accrual and Cash Basis Accounting

Week 3 CheckPoint-Adjustments and Accrual and Cash Basis Accounting

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Week 3 CheckPoint-Adjustments and Accrual and Cash Basis Accounting Melissa Krol QUICK STUDY QS 3-1 Identifying accounting adjustments C3 Classify the following adjusting entries as involving prepaid expenses (PE), unearned revenues (UR), accrued expenses (AE), or accrued revenues (AR). a. UR To record revenue earned that was previously received as cash in advance. b. PE To record annual depreciation expense. c. AE To record wages expense incurred but not yet paid (nor recorded). d. AR To record revenue earned but not yet billed (nor recorded). e. PE To record expiration of prepaid insurance. QS 3-9 Computing accrual and cash income C1 C2 In its first year of operations, Harden Co. earned $39,000 in revenues and received $33,000 cash from these customers. The company incurred expenses of $22,500 but had not paid $2,250 of them at yearend. Harden also prepaid $3,750 cash for expenses that would be incurred the next year. Calculate the first year’s net income under both the cash basis and the accrual basis of
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This note was uploaded on 09/06/2010 for the course ACC 225 acc 225 taught by Professor Unknown during the Spring '10 term at University of Phoenix.

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Week 3 CheckPoint-Adjustments and Accrual and Cash Basis Accounting

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