Adjusting Accounts for Financial Statements Paper 2
1
Dee Preciated rented an office space to Core Poration for three months at $500 per month, payable at the end of the third month, January 31. No year-end adjusting entry was recorded on December 31. As a consequence of this oversight,
Detailed Answer
Correct answer: (D)
assets were understated and revenue was understated
2
You have agreed to keep the accounting records for a business that has agreed to pay you $800 per month, beginning December 16. You use the accrual basis of accounting and recorded adjusting entries on December 31. When you receive the $800 on January 16, you will record the following entry