Asked by Haktan Öztürkçü on Jul 18, 2024
Verified
Identify the impact on the balance sheet if the following information is not used to adjust the accounts.
1. Supplies consumed totaled $2750.
2. Interest accrues on notes payable at the rate of $180 per month.
3. Insurance of $470 expired during the month.
4. Plant and equipment are depreciated at the rate of $1450 per month.
Plant And Equipment
Plant and Equipment refer to the long-term assets used in the operation of a business, excluding buildings or real estate, that contribute to the production process.
Notes Payable
A financial obligation represented by a written promissory note, which specifies the amounts borrowed, interest rate, and maturity date.
Supplies Consumed
The cost of supplies used during a specific period, often impacting the income statement through expense recognition.
- Undertake adjustments regarding prepaid expenses and expenses accruing over time.
Verified Answer
2. Liabilities understated and Owner's Equity overstated by $180.
3. Assets overstated and Owner's Equity overstated by $470.
4. Assets overstated and Owner's Equity overstated by $1450.
Learning Objectives
- Undertake adjustments regarding prepaid expenses and expenses accruing over time.
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