Why are adjustments needed at the end of accounting period

Reference no: EM13899917

1. Employees performed services in 2006, but the wages were not paid until 2007. During which year would the wages expense be reported on the income statement under (a) the cash basis? (b) the accrual basis?

2. Which of the following accounts would appear only in an accrual basis accounting system, and which could appear in either a cash basis or an accrual basis account- ing system? (a) Capital Stock, (b) Fees Earned, (c) Accounts Payable, (d) Land, (e) Utilities Expense, and (f) Accounts Receivable.

3. Is the land balance before the accounts have been adjusted the amount that should normally be reported on the balance sheet? Explain.

4. Is the supplies balance before the accounts have been adjusted the amount that should normally be reported on the balance sheet? Explain.

5. Why are adjustments needed at the end of an accounting period?

6. Identify the four different categories of adjustments frequently required at the end of an accounting period.

7. If the effect of an adjustment is to increase the balance of a liability account, which of the following statements de- scribes the effect of the adjustment on the other account?

a. Increases the balance of a revenue account.
b. Increases the balance of an expense account.
c. Increases the balance of an asset account.

Reference no: EM13899917

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