Question

New Translate Web... 2 23 59 On July 31, 2020 Baker completed a $1,500 service job for a customer. The customer did not pay cash for the job when it was completed the customer will pay for the job on August 15, 2020. It was late in the day when the job was completed and Baker's accounting department did not have time to invoice the customer for the $1,500 completed job, If Baker did not make the July 31 adjusting entry related to the unbilled service job what errors would the July financial statements contain? Adjusting Entry A. The errors on the Income Statement for July would be: • items understated: none . items overstated: Service Revenue, Net Income The errors on the July 31 Balance Sheet would be: . items understated: none . items overstated: Accounts Receivable, Total Assets, Retained Earnings, Total Equity, Total Liabilities and Equity . Adjusting Entry B. The errors on the Income Statement for July would be: . item understated: Service Revenue item overstated: Net Income . The errors on the July 31 Balance 11 Proctorio. ### Iorctatod. Retained Jity

Answer 1

Answer (23) Option(3) Adjusting Entry 3 is the correct answer Explanation: If this adjusting entry is not done due to this error service Revenue and net income is understated and as well as accounts receivable ,total Assets, retained earnings, total equity also understated. Answer (24) Option(1) Increase a liability account is the correct answer Explanation: Example: If Equipment is purchased on Credit then one Account which is increasing is Asset Account and the other Account is liability Account i,e. Accounts Payable. Answer (25) Option(1 ) Unearned Revenue is the correct answer Explanation: Unearned Revenue is shown in the Balance Sheet on Liabilities side. Answer (26) Option(4) is the correct answer Explanation: All of the Revenue and Expenses Account balances are used to prepare the Income Statement and by this Net Income is Calculated.

Answer (27) Option(2) $35,000 is the correct answer Calculation: Beginning Retained Earnings+ Net Ending Retained Earnings Income - Dividends $30,000+ $10,000 - $5,000 $35,000 Answer (28) Option(4) is the correct answer Explanation: The Income Statement covers a period of time and Balance Sheet reports on a point of time. Answer (29) Option(1 ) is the correct answer Explanation: When you Debit an expense account you can say that you increased the Expense Account and decreased the Owner's Equity. Answer (30) TRUE Explanation: If Expenses are greater than Revenue then there is a Loss. Due to the loss Retained Earnings is Decrease and have debit balance.

Answer (32) Option(3) $500 is the correct answer Explanation: Payment of Rent on December, 1 is Outstanding Rent Expense, Payment of Rent on December 31 is Prepaid Rent and Payment of Rent on December 15 which is related to current month rent is recorded as Rent Expense. Answer (33) Option(2 ) is the correct answer Explanation: Adjusting Entries are made on the last day of accounting period and are needed because we use an Accural basis Accounting System.Accrual accounting is a method of accounting where revenues and expenses are recorded when they are earned, regardless of when the money is actually received or paid.