Question

The trial balance of Woods Company includes the following balance sheet accounts. Identify the accounts that might require adjustment. For each account that requires adjustment, indicate (1) the type of adjusting entry and (2) the related account in the adjusting entry.
(a) Accounts Receivable
(b) Prepaid Insurance
(c) Equipment
(d) Accumulated Depreciation Equipment
(e) Notes Payable
(f) Interest Payable
(g) Unearned Service Revenue

Answer 1

Answer: I)Accrued ReVenue /Service Revenue.

2.-Prepaid Expenses/ Insurance Expenses

3.No Entry

4.Prepaid expenses /depreciation expense

5.Accrued Interest payable/Interest Expenses

6.Accrued expenses/ Interest expenses.

7.Unearned expenses/ Service Revenue

Explanation:The type of adjusting entry/ the related account in the adjusting entry is given below

a)For Accounts Receivable---Accrued ReVenue /Service Revenue.

(b) For Prepaid Insurance---Prepaid Expenses/ Insurance Expenses

(c) Equipment ---- Equipment Exoenses. Equipment is a long-term asset that will not last so the cost of equipment is recorded in the account Equipment. No entry is needed in this account.

(d) For Accumulated Depreciation Equipment-----Prepaid expenses /depreciation expense

e) Notes Payable : Accrued Interest payable/ Interest Expenses

(f) Interest Payable--- Accrued expenses/ Interest expenses

(g) Unearned Service Revenue--Unearned expenses/ Service Revenue