Question

1. Ally Cupcakes received a deposit for work in advance for 3000 in May.

1. Record the transaction for this deposit received in May.

Assets	Liabilities	Equity

2. During the month of June, some work was completed and 700 can now be recorded as revenue. What adjustment should be recorded to the accounting equation to properly state the accounts at June 30 (include account and dollar amt)?

Assets	Liabilities	Equity

3. If the above adjustment is not recorded at the end of the month, June revenue will be ________________________, liabilities will be ___________________, and net income will be ________________________ (indicate understated or overstated for all 3)

2. The supplies account of Lemon Corp. on Dec 31 shows a balance of $4,000. An actual count of the supplies shows the balance is $3,400.

1. What should be recorded to the accounting equation to adjust the balance in the supplies account to properly reflect the balance at Dec 31?

Assets	Liabilities	Equity

2. If the above transaction is not recorded at the end of the month, Dec. assets will be ___________________, expenses will be ______________________, and net income will be _______________________ (indicate understated or overstated for all 3)

3. At the end of the October, Bob's Bakery. owes employee wages of $750, but hasn’t paid them (they will be paid in Nov.)

1. What should be recorded to the accounting equation to account for the wages that are owed?

Assets	Liabilities	Equity

           

2. If the above transaction is not recorded at the end of the month, Oct. expenses will be _______________________, liabilities will be _________________________, and net income will be _______________________ (indicate understated or overstated for all 3)

Answer 1