Determine whether recording each of the following adjustments will increase (i),

Question

Determine whether recording each of the following adjustments will increase (i), decrease (d), or have no effect (NE) on each of the three elements of the accounting equation.

Transactions                                       Assets   = Liabilities  + SE

Ex: Wages earned during the period but not yet paid NE I D

are accrued.

1.     Prepaid insurance is reduced for the portion

of the policy that has expired during the period.

2.     Interest incurred during the period but not yet

Paid is accrued.

3.     Depreciation for the period is recorded

4.     Revenue is recorded for the earned portion of a

liability for amounts collected in advance from

customers.

5.     Rent revenue is recorded for amounts owed by

a tenant but not yet received.

6.     Income taxes owed but not yet paid are accrued.

Explanation / Answer

Please kindly rate the most accurate answer. Thanks.

Assets Liabilities Equity 1 D NE D 2 NE I D 3 D NE D 4 NE D I 5 I NE I 6 NE I D

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