Exercise #1 For each situation, indicate which category of year-end adjustment i
ID: 2339926 • Letter: E
Question
Exercise #1 For each situation, indicate which category of year-end adjustment is needed- Deferred Expenses (Prepaid Expenses), Deferred Revenues (Unearned Revenues) Accrued Expenses, or Accrued Revenues. a. Equipment depreciation was $1,300. b. $600 of advertising expense was incurred but not paid. c. Office Supplies on hand at the end of the year totaled $200. The begining balance of Office Supplies was $500. d. $1,000 of rent revenue was eamed but not recorded or received. e. Uneamed revenue of $4,000 has been eamed. a. b. d. e.Explanation / Answer
a.Equipment Depreciation was $ 1300- Deferred Expense. This is the kind of expenses where we have already incurred the expense but the same is not consumed.
b.$ 600 of advertising Expense was incured but not paid-Accrued Expenses. This is the kind of expense where the amount is not paid but it is occured.
c.office supplies on hand at the end of the year totaled $ 200. the beginning balance of office supplies was $ 500- Deferred Expenses
d.$1,000 of rent revenue was earned but not recorded or received- Accrued Revenue- This is the kind of income where the amount is not Received but Revenue is earned.
e. Unearned Revenue of $ 4,000 has been earned- Unearned Revenue-Amount has been received but revenue not Earned.
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