Determining Financial Statement Effects of Adjusting Entries (P4-5)
Refer to AP4-3.
Required:
1. Indicate whether each transaction relates to a deferred revenue, deferred expense, accrued revenue, or accrued expense.
2. Using the following headings, indicate the effect of each adjusting entry and the amount of each. Use + for increase, – for decrease, and NE for no effect.(Reminder: Assets = Liabilities + Stockholders’ Equity; Revenues – Expenses = Net Income; and Net Income accounts are closed to Retained Earnings, a part of Stockholders” Equity.)
| BALANCE SHEET | INCOME STATEMENT | ||||
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| Stockholders’ |
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| Net |
Transaction | Assets | Liabilities | Equity | Revenues | Expenses | Income |
a. |
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b. |
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(etc.) |
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