1.Some accounts need to be adjusted because

(a) they are not up to date at the time financial statements are prepared.

(b) there are always errors made in recording transactions.

(c) there are never enough accounts to record all the transactions.

(d) management can't decide what they want to report.

2. Equipment costing $6,000 had a useful life of five years. The adjusting journal entry to record the depreciation for one month would consist of

(a) a debit to Depreciation Expense for $100 and a credit to Accumulated DepreciationEquipment for $100.

(b) a debit to Depreciation Expense for $1,200 and a credit to Equipment for $1,200.

(c) a debit to Depreciation Expense for $100 and a credit to Equipment for $100.

(d) a credit to Depreciation Expense for $100 and a debit to Accumulated DepreciationEquipment for $100.

3. At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?

(a) Liabilities at the end of the year are understated.

(b) Salary Expense for the year is overstated.

(c) Shareholders equity at the end of the year is understated.

(d) Assets at the end of the year are understated.