17. Which of the following statements is false? A) Revenues increase stockholders' equity B) Revenues have normal credit balances C) Revenues are a positive factor in the computation of net income. D) Revenues are increased by debits. 18. Adjusting entries are A) not necessary if the accounting system is operating properly. B) usually required before financial statements are prepared. C) made whenever management desires to change an account balance. D) made to balance sheet accounts only. 19. A law firm received $3,000 cash for legal services to be rendered in the future. The full amount was credited to the liability account Unearned Service Revenue. If the legal services have been rendered at the end of the accounting period and no adjusting entry is made, this would cause A) expenses to be overstated. B) net income to be overstated. c) liabilities to be understated. D) revenues to be understated. 20. The balance in the supplies account on June 1 was $5,200, supplies purchased during June were $3,500, and the supplies on hand at June 30 were $3,000. The amount to be used for the appropriate adjusting entry is A) $3,500. B) $5.700 C) $6,500. D) $11,700 21. The balance in the Prepaid Rent account before adjustment at the end of the year is $21,000, which represents three months' rent paid on December 1. The adjusting entry required on December 31 is to A) debit Rent Expense, $7,000; credit Prepaid Rent, $7,000. B) debit Rent Expense, $14,000, credit Prepaid Rent $14,000 c) debit Prepaid Rent, $7.000; credit Rent Expense, $7,000. D) debit Prepaid Rent, $14.000; credit Rent Expense, $14,000