Brief Exercise 3-2

Moteki Company accumulates the following adjustment data at December 31. Indicate the type of adjustment (prepaid expenses, accrued revenues and so on), and the status of accounts before adjustment (overstated or understated). (Enter answers in alphabetical order.)

1.	Supplies of $100 are on hand.
2.	Services provided but not recorded total $900.
3.	Interest of $200 has accumulated on a note payable.
4.	Rent collected in advance totaling $650 has been earned.

Item	Type of Adjustment	Account Balances before Adjustment
1.		Expenses OverstatedExpenses UnderstatedRevenues UnderstatedRevenues OverstatedLiabilities OverstatedLiabilities Understated
Expenses OverstatedExpenses UnderstatedRevenues UnderstatedRevenues OverstatedLiabilities OverstatedLiabilities Understated
2.	Unearned RevenuesPrepaid ExpensesAccrued ExpensesAccrued Revenues	Liabilities OverstatedExpenses UnderstatedAssets UnderstatedLiabilities UnderstatedAssets OverstatedExpenses Overstated
Expenses OverstatedLiabilities UnderstatedRevenues UnderstatedExpenses UnderstatedLiabilities OverstatedRevenues Overstated
3.	Unearned RevenuesAccrued RevenuesPrepaid ExpensesAccrued Expenses	Expenses UnderstatedRevenues OverstatedRevenues UnderstatedAssets OverstatedAssets UnderstatedExpenses Overstated
Assets UnderstatedRevenues UnderstatedRevenues OverstatedLiabilities OverstatedAssets OverstatedLiabilities Understated
4.	Prepaid ExpensesAccrued RevenuesUnearned RevenuesAccrued Expenses	Assets UnderstatedExpenses UnderstatedLiabilities OverstatedExpenses OverstatedLiabilities UnderstatedAssets Overstated
Revenues OverstatedExpenses OverstatedExpenses UnderstatedRevenues UnderstatedAssets OverstatedAssets Understated

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