Question

If possible, explain how it's that answer.

Brief Exercise 3-02 Gee Company accumulates the following adjustment data at December 31. Indicate the type of adjustment (prepaid expense, accrued revenue, and so on), and the status of accounts before adjustment (overstated or understated). (Enter answers in alphabetical order.) 1. Supplies of $150 are on hand. 2. Services performed but not recorded total $900. 3. Interest of $200 has accumulated on a note payable. 4. Rent collected in advance totaling $850 has been earned. Item Type of Adjustment Account Balances before Adjustment

Answer 1

Classification

Type	Type of adjustment	Account balance before adjustment
1	prepaid expense	Supplies expense understated
		Supplies overstated
2	Accrued revenue	Account receivable under stated
		Service revenue understated
3	Accrued expense	Interest expense understated
		Interest payable understated
4	Unearned revenue	Unearned revenue overstated
		service revenue understated