Explaining worksheet items [10 min]Link Back to Chapter 3 (Adjusting Entries). Consider th...

Explaining worksheet items [10 min]

Link Back to Chapter 3 (Adjusting Entries). Consider the following adjusting entries:

Requirement

1. State one reason why each of the previous adjusting entries were made.

Example: The explanation for journal entry a could be some of the Prepaid rent has expired. Another correct explanation would be the asset account Prepaid rent was overstated. A third correct explanation would be that Rent expense incurred was understated.