Question

Current Attempt in Progress The trial balance of Woods Company includes the following balance sheet accounts. Identify the accounts that might require adjustment. For each account that requires adjustment indicate (1) the type of adjusting entry and (2) the related account in the adjusting entry (1) Type of Adjustment (2) Related Account a, Account Accounts Receivable. Prepaid Insurance b Equipment C d Accumulated Depreciation-Equipment. e. Notes Payable C . Interest Payable. 8 Unearned Service Revenue e Textbook and Media Save for Later Attempts: 0 of 3 used Submit Answer

Answer 1

Solution:

	Account	Type of Adjustment	Related Account
(a)	Accounts Receivable	Accrued Revenues	Service Revenue
(b)	Prepaid Insurance	Prepaid Expenses	Insurance Expense
(c)	Equipment	Not required	Not required
(d)	Accum. Depreciation	Prepaid Expenses	Depreciation Expense- Equipment
(e)	Notes Payable	Not required	Not required
(f)	Interest Payable	Accrued Expenses	Interest Expense
(g)	Unearned Service	Unearned Revenues	Service Revenue

Accrued revenues include the accounts receivable and related account will be service revenue. Accrued expenses include the interest payable and related account will be interest expense. Prepaid expenses include prepaid insurance and accumulated depreciation; and related account will be insurance expense and interest expense. Unearned revenues includes unearned service and related account will be service revenue