Try another version of this question In recording adjusting entries, ABC Financial Advisors failed to record the adjusting entries for the following situations: Determine the effects on the income statement and balance sheet by identifying whether assets, liabilities, equity, revenue, and expenses are either overstated or understated. Use the following table. Adjustment in line a. has been provided as an example.
Adjustment Balance Sheet Income Statement Not Recorded Assets Liabilities Equity Revenue Expenses Net Income a. Office supplies on hand, $100. Overstated N/A Overstated N/A Understated Overstated b. Accrued revenues, $100. c. Accrued interest expense, $100. d. Depreciation, $100. e. Unearned revenue that has been earned, $100. f. Accrued wages, $100. g. Insurance expired, $100. Adjustment Balance Sheet Income Statement Not Recorded Assets Liabilities Equity Revenue Expenses Net Income a. Office supplies on hand, $100. Overstated N/A Overstated N/A Understated Overstated b. Accrued revenues, $100. Understated N/A Understated Understated N/A Understated c. Accrued interest expense, $100. N/A Understated Overstated N/A Understated Overstated d. Depreciation, $100. Overstated N/A Overstated N/A Understated Overstated e. Unearned revenue that has been earned, $100. N/A Overstated Understated Understated N/A Understated f. Accrued wages, $100. N/A Understated Overstated N/A Understated Overstated g. Insurance expired, $100. Overstated N/A Overstated N/A Understated Overstated