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Problem 1: When a worksheet is used:
Multiple Choice
Option 1: Adjusting entries are not prepared, since adjustments are shown on the worksheet.
Option 2: Revenue and expense accounts do not have to be closed to the Income Summary account, because the income statement is prepared from the worksheet and net income is already computed.
Option 3: Financial statements may be prepared before recording adjusting and closing entries in the accounting records.
Option 4: The Income Statement column and Balance Sheet column of the worksheet eliminate the need to prepare formal financial statements for a business.
On July 1, 2014, Crowe Co. pays $24,000 to Zubin Insurance Co. for a 3-year insurance policy. Both companies have fiscal years ending December 31. Journalize the entry on July 1 and the adjusting entry on December 31 for Zubin Insurance Co. Zubin use..
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