Gemini asked:


Please answer and explain the following
1. the balance in the Prepaid Insurance account before adjustment at the end of the year is $480, which represents 12 months’ insurance paid on 12/1. The adjusting entry required on 12/31, the end of the fiscal year is (debit Insurance Expense,$40; credit Prepaid Insurance, $40, right??)

2 A firm pays weekly wages of $10,000 on Friday for a five-day week ending on that day. If the fiscal period ends on Wednesday, should the adjusting entry be (debit Wages Expense, $6,000; credit Wages Payable, $6,000, right??)

3. Failure to adjust for accrued wages at year end will result in an (Understatement of total liabilities, right??)

4. Which of the following is an example of a deferral?
a. Legal fees earned but not yeat collected.
b. Estimated income taxes for the year.
c. A one-year insurance policy purchased but not expensed.
d. Medical fees earned but not yet collected.