-Describe two transactions, the accounts that are affected and the affect on the respective financial statements.
-Discuss who may use financial statements and how the various users may use the financial statement information?
1. An adjustment at the end of the period for office supplies used.
Office supplies 200
Office expenses 200
2. An adjustment for insurance portion that has been used as year end.
Prepaid insurance 600
Insurance expense 600
In #1, office supplies is debited for the amount of the office supplies that are used, which is an asset account, ...
The solution describes two transactions, the accounts that are affected and the affect on the respective financial statements.