1 Adjusting entries are required a. when expenses are recorded in the period in which they are incurred. b. because some costs expire with the passage of time and have not yet been journalized. c. when the company's profits are below the budget. d. When revenues are recorded in the period in which they are earned. Question 2 If an adjustment is needed for prepaid expenses, the a. asset and related expense are understated before adjustment. b. asset is overstated and the related expense is understated before adjustment. c. asset and related expense are overstated before adjustment. d. asset is understated and the related expense is overstated before adjustment. Question 3 Employees at B Corporation are paid $5,000 cash every Friday for working Monday through Friday. The calendar year accounting period ends on Wednesday, December 31. How much salary expense should be recorded two days later on January 2? a. $5,000 b. $3,000 c. None, matching requires the weekly salary to be accrued on December 31. d $2,000