If a required prepaid adjustment had not been made

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Intermediate Accounting: Reporting and Analysis
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Chapter 2 / Exercise C2-5
Intermediate Accounting: Reporting and Analysis
Jones/Wahlen
Expert Verified
12. If a required prepaid adjustment had not been made, the financial statements would have been affected as follows ______. a. net income understated, assets understated, liabilities understated, and owner's equity unaffected b. net income understated, assets unaffected, liabilities overstated, and owner's equity understated c. net income overstated, assets understated, liabilities understated, and owner's equity unaffected d. net income overstated, assets overstated, liabilities unaffected, and owner's equity overstated
13. When an unearned revenue is initially recorded as a revenue, the adjusting entry would affect net income as follows___.
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Intermediate Accounting: Reporting and Analysis
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Chapter 2 / Exercise C2-5
Intermediate Accounting: Reporting and Analysis
Jones/Wahlen
Expert Verified
c. Increase d. No effect 14. The balance in prepaid rent after adjustment represents _____.
15. If a required unearned revenue adjustment had not been made, the financial statements would have been affected as follows ___.
16. On September 1, 20X4, Four Brothers Company pays $48,000 cash for six months rent. The balance in prepaid rent on December 31, 20X4, after adjustment, would be_______. a. $6,000 b. $24,000 c. $12,000 d. $16,000
17. On April 1 of the current year, Jamie Company received $15,000 for services to be performed evenly over the next 12 months. Jamie Company initially recorded the $15,000 as service revenue. The adjusting entry on December 31 of the current year will include a ____.
18. The supplies account shows a beginning balance of $3,000. Assume the supplies account shows a debit for $5,500 representing supplies purchased during the period and the supplies inventory at year-end is $1,700. The adjusting entry involves a_______.

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