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spin [16.1K]
3 years ago
5

A company records the fees for legal services paid in advance by its clients in an account called Unearned Legal Fees. If the co

mpany fails to make the end-of-period adjusting entry to record the portion of these fees that has been earned on effect will be
An understatement of equity T/F
Business
2 answers:
White raven [17]3 years ago
5 0

Answer:

True

Explanation:

Now the initial jounal entry of the Unearned Fees was recorded as:

Dr Cash received XX

Cr        Unearned Fees XX ........... Is a liability

Now the reason why the statement is true can be best explained from the following equation:

Equity = Ordinary Stock + (Revenue - Expense - Dividend)

Now just look at the above equation and the journal entry, the unearned fees increased the liability and if this amount is not waived off to the amount the unearned fees are converted to earnings, I mean if you have received the amount for 3 months services in advance and only one month services are delivered then the 1/3 part of the unearned fees will recognized as earned. If it is not complied then we can see in the above equation that the revenue would decrease and this decrease will decrease the equity.

mezya [45]3 years ago
5 0

Answer:

T

Explanation:

At the end of each accounting year, the net income made is posted to the year end retained earnings thus increasing the shareholder's equity in the balance sheet.

When fees are received in advance,

Debit Cash account

Credit Unearned Legal Fees

when fees are earned

Debit Unearned Legal Fees

Credit Revenue

Thus, If the company fails to make the end-of-period adjusting entry to record the portion of these fees that has been earned on effect will be an understatement of revenue which will result in an understatement of net income and thus an understatement of equity.

True

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Pani-rosa [81]

Answer:

b. Reducing the minimum wage and the time and cost to open a business would shift the long-run aggregate supply curve to the right

Explanation:

Minimum wage is a wage set by the government, to pay for laborers. Wages below this is illegal. Wages are also a major cost to any firm. When they have been reduced, cost of production is likely to fall. Cost of production is a factor affecting supply. When cost of production falls, supply shifts right.

This is explained as that when cost of production falls, businesses can now make higher profits. This acts as a motivation for many other firms to also enter into the market. Therefore, supply is likely to rise in the long-run, shifting the supply curve to the right.

Time and cost to open a business is another factor affecting supply. When the time and cost is high, it discourages new firms because they do not want to undergo the hassle of submitting many legal documents or may not have enough funds to pay for all the costs. However, when the cost and time taken falls, more firms will be willing and able to enter into the market. Thus, the supply curve shifts right in the long run, increasing quantity supplied.

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3 years ago
TP2.
Karo-lina-s [1.5K]

Answer and explanation:

As their name describes, <em>nonprofit entities</em> are organizations whose main plan is not to have revenues out of their operations. They usually provide social services to different sectors of the population and can handle their operations mainly thanks to charity and donations. While making their budgets, these organizations cannot estimate their revenues since they cannot take donations for granted. Instead, they estimate their expenses since they will be incurred for sure.

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One of the best ways to avoid disasters at a catering event is to
evablogger [386]
Option A.

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Answer:

B. Ben

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otez555 [7]

Answer:

The correct answer is D

Explanation:

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68% of the data fall under one standard deviation of mean.

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= $190 and $110

3 0
2 years ago
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