View the step-by-step solution to: 18) The business failed to close any of the revenue accounts,

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18) The business failed to close any of the revenue accounts, this error will cause:
A) the assets will be overstated.
B) the liabilities will be overstated.
C) before closing it, Income Summary will have a debit balance.
D) before closing it, Income Summary will have a credit balance.
24) The August bank statement for Mobile Service shows a balance of $8,900, but the balance per
books shows a cash balance of $8,310. Other information includes:
1. A check for $10 was recorded on the books as $100.
2. Included on the bank statement was a note collected by the bank for $600 plus interest of
$40.
3. Checks outstanding totaled $480.
4. Bank service charges were $20.
5. Deposits in transit were $600.
Which item(s) should be subtracted from the balance per books?
A) Checks outstanding and bank service charge
B) Bank service charge and note collected by the bank
C) Bank service charge
D) Deposit in transit
25) From the bank reconciliation no entry was recorded for the interest on a note collected. This
would cause:
A) liabilities to be understated.
B) assets to be overstated.
C) liabilities to be overstated.
D) assets to be understated.
7) There was no adjustment made for the prepaid insurance. This would:
A) overstate this period’s net income and overstate the next period’s net income.
B) understate this period’s net income and overstate the next period’s net income.
C) overstate this period’s net income and understate the next period’s net income.
D) understate this period’s net income and understate the next period’s net income.
8) The adjustment for the deferral of a prepaid item was omitted. This would:
A) understate the period’s expenses and overstate the period end assets.
B) overstate the period’s expenses and overstate the period end assets.
C) understate the period’s expenses and understate the period end assets.
D) overstate the period’s expenses and understate the period end assets.
9) To record the expiration of part of the lease (rent) will require an adjustment
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18) The business failed to close any of the revenue accounts, this error will cause:
A) the assets will be overstated.
B) the liabilities will be overstated.
C) before closing it, Income Summary...

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