Question

Head the requirements To record revenue that was collected in advance ox Requet. Henderson had recorded the which speciwgory of accounts on the brand tem b a nd i Begin by completing the table for adjustment and the actions through More Info Specific Category of Specific Category Adjusting Accounts on the Over! of Accounts on the Over Balance Sheet Understand Income Statement Undert The company received its electric bill on December 20 for 3 buwie pay until January 5 Use the Pa c count) dan purchased o n ce policy to 3500 Henderson recorded a d e ad . As of December 31 Henderson had d 000 of charter that has not been recorded or received Choose from any drop down list and then click Check Answer Henderson's sing boat was purchased on January at a cost of 2 500 Henderson expects to use the boat for five years and that it will have residual value 2500 Du ne annual decision the 4 mg sraigne depreciation method is used 4 Type here to search TOSHIBA

The directions say "If Henderson had not recorded the adjusting entries, indicate which specific category of accounts on the financial statements would be misstated and if the misstatement is overstated or understated. Begin by completing the table for adjustment a and then transactions b through e."

Answer 1

Adjusting Entry	Account Title	Specific category of Accounts on the Balance Sheet	Over/Understated	Specific category of Accounts on the Income Statement	Over/Understated
a.	Utilities Expenses			Expense	Understated
	Utilities payable	Current Liabilities	Understated
b.	Insurance expense			Expense	Understated
	Prepaid Insurance	Current Assets	Overstated
c.	Accounts receivable	Current Assets	Understated
	Charter revenue			Income	Understated
d.	Depreciation expense			Expense	Understated
	Accumulated depreciation-Fishing boat	Net fixed assets	Overstated
e.	Unearned charter revenue	Current Liabilities	Overstated
	Charter revenue			Income	Understated