Accrual Accounting Concepts and Adjustment
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Proctor Company accumulates the following adjustment data at December 31:
a). Service revenue earned, but unbilled totals $600.
b). Store supplies of $300 are on hand. Supplies account shows $1,900 balance.
c). Utility expenses of $275 are unpaid.
d). Service Revenue of $490 collected in advance has been earned.
e). Salaries of $800 are unpaid.
f). Prepaid insurance totaling $400 has expired.
For each item indicate (1) the type of adjustment (Prepaid Expense, Unearned
Revenue, Accrued Revenue, or Accrued Expense and (2) the status of the
accounts before adjustment (overstated or understated).
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Solution Summary
Find attached, a formatted MS Excel spreadsheet which explains the concepts of accrual accounting through use of the adjustment financial data of Proctor Company.
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