Show the effect, if any, of the transaction entry or adjusting entry on the appr

Question

Show the effect, if any, of the transaction entry or adjusting entry on the appropriate balance sheet category or on the income statement by selecting the amount and indicating whether it is an addition (+) or a subtraction (). Column headings reflect the expanded balance sheet equation; items that affect net income should not be shown as affecting owners' equity. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category. Transaction a has been completed as an illustration.

Show the effect, if any, of the transaction entry or adjusting entry on the appropriate balance sheet category or on the income statement by selecting the amount and indicating whether it is an addition (+) or a subtraction (). Column headings reflect the expanded balance sheet equation; items that affect net income should not be shown as affecting owners' equity. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category. Transaction a has been completed as an illustration.

Explanation / Answer

Transaction/Adjutment Assets Liabilities stockholder Equity Net income Provided services to a client on account; revenues totaled $550. (+) 550 (+) 550 Paid an insurance premium of $360 for the coming year. An asset, Prepaid Insurance, was debited. (-) 360 (+) 360 Recognized insurance expense for one month from the premium transaction in b via a reclassification adjusting entry. (-) 30 (-) 30 Paid $800 of wages accrued at the end of the prior month. (-) 800 (-) 800 Paid $2,600 of wages for the current month. (-) 2600 (-) 2600 Accrued $600 of wages at the end of the current month. (+) 600 (-) 600 Received cash of $1,500 on accounts receivable accrued at the end of the prior month. (+) 1500 ,-1500

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