11. if Aye Corp fails to adjust the Prepaid Rent account for rent that has expired, what effect will this have on that month's financial statements? (a) This will have no effect on the financial statements. (5) Expenses will be overstated and profit and shareholders' equity will be understated. (C) Assets will be overstated and profit and shareholders' equity will be understated. (d) Assets will be overstated and profit and shareholders' equity will be overstated. 12. Clarissa Credit, CGA, has billed her clients for services performed in October. In November, she receives payments from her clients. What entry will she make upon receipt of the payments? (a) Debit Unearned Revenue and credit Service Revenue. (b) Debit Cash and credit Accounts Receivable. (C) Debit Accounts Receivable and credit Service Revenue. (d) Debit Cash and credit Service Revenue. 13. Which of the following errors, each considered individually, would cause the trial balance to be out of balance? a) A payment of $148 to a creditor was posted as a debit to accounts payable and a debit of $148 to cash. b) Cash received from a customer on account was posted as a debit of $350 to cash and a credit of $350 to accounts payable. (c) A payment of $59 for supplies was posted as a debit of $95 to supplies and a credit of $95 to cash. (d) A transaction was not posted. 14. Royal Machines Limited gathered the following reconciling information in preparing its June bank reconciliation: Cash balance per books, June 30 $12,000 Electronic collection of account 6,000 Outstanding cheques 9,000 Deposits in transit 4,500 Bank service charge 75 NSF cheque 1,200 The adjusted cash balance per books at June 30 is (a) $ 8,775. (b) $12,000. (c) $16,500. (d) $16,725