choose the correct answer

#1: - Latah Inc paid American Corp in advance $100,000 for a fourteen month project. At the end of the year American Corp forgot to record the revenue earned during the past twelve months. What happens to net income?

- It is overstated

- It is understated.

- Only the expenses account is changed.

- There is no impact to the income statement or balance sheet.

#2: - Latah Inc paid American Corp in advance $100,000 for a fourteen month project. At the end of the year American Corp forgot to record the revenue earned during the past twelve months. What happens to total liabilities?

- It is overstated

- It is understated.

- Only the expenses account is changed.

- There is no impact to the income statement or balance sheet.

#3: - Smith Realty Company received a check for $9,000 on October 1, which represents a 6-month advance payment of rent on a building it rents to a retailer. Unearned Rental Revenue was credited for the full $9,000. Financial statements will be prepared on Dec 31. Smith Realty should make the following adjusting entry on December 31.

- Debit Unearned Rental Revenue, $4,500; Credit Rental Revenue, $4,500

- Debit Rental Revenue, $4,500; Credit Unearned Rental Revenue, $4,500

- Debit Unearned Rental Revenue, $9,000; Credit Rental Revenue, $9,000.

- Debit Cash, $9,000; Credit Rental Revenue, $9,000.

#4: - Reese Company purchased office supplies costing $4,600 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $3,000 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

- Debit Office Supplies Expense, $1,600; Credit Office Supplies, $1,600.

- Debit Office Supplies, $3,000; Credit Office Supplies Expense, $3,000.

- Debit Office Supplies Expense, $3,000; Credit Office Supplies, $3,000.

- Debit Office Supplies, $1,600; Credit Office Supplies Expense,