Question & Answer: Assets Understated Revenues Overstated Liabilities Understated Liabilities Overstated Expenses Und…..

Assets Understated Revenues Overstated Liabilities Understated Liabilities Overstated Expenses Understated Assets Overstated Expenses Overstated Revenues Understated

Assets Understated Revenues Overstated Liabilities Understated Liabilities Overstated Expenses Understated Assets Overstated Expenses Overstated Revenues Understated Let Company accumulates the following adjustment data at December 31. 1. Services performed but unbilled total $1,000. 2. Supplies of $300 have been used. 3. Utility expenses of $225 are unpaid. 4. Services performed of $260 collected in advance. 5. Salaries of $800 are unpaid. 6. Prepaid insurance totaling $350 has expired. For each of the above items indicate the following. (Enter answers in alphabetical order.) (a) The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense). (b) The status of accounts before adjustment (overstatement or understatement).

Expert Answer


1	Accrued revenues	Assets understated
		revenues understated

2	prepaid expenses	asset overstated
		expense understated

3	accrued expenses	expense understated
		liabilities understated

4	unearned revenues	liabilities overstated
		revenues understated

5	Accrued expenses	expense understated
		liabilities understated

6	prepaid expenses	assets overstated
		expense understated

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