Nunez Company accumulates the following adjustment data at December 31. Indicate

Question

Nunez Company accumulates the following adjustment data at December 31. Indicate (a) the type of adjustment (prepaid expense, accrued revenues and so on), and (b) the status of accounts before adjustment (overstated or understated).

1. Supplies of $100 are on hand.
2. Services provided but not recorded total $900.
3. Interest of $200 has accumulated on a note payable.
4. Rent collected in advance totaling $800 has been earned.


(a)


(b)

Item


Type of Adjustment


Account Balances before Adjustment

1.


2.
3.
4.

Explanation / Answer

1. Supplies of $100 are on hand. Prepaid expense Supplies overstated 2. Services provided but not recorded total $900. Revenues earned Revenues understated 3. Interest of $200 has accumulated on a note payable. Accrued Interest Expense Interest Expense understated 4. Rent collected in advance totaling $800 has been earned. Accrued Revenues Revenues understated

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