Entity A purchased a three-year insuance policy on Jarwary 1 foc S7,200 and dobiod it to Prcpaid insurance if Enbly A does not make the proper adjusting entry at the end of the year which of the following is correct? Hint Make the correct acpusting entry fist Retained earnings willbeunderstated Net income will beunderstated Current assets will be anderstated Current assets will be overstated 21.2 pounts Before monthend adjuslments ave made, the Deceenber 2023 tral balance of Entity 1 contans rovonue of $13,000 and expenses of $9,000 tesuling in income before adjusiments of S4,000. indicale whether the lollowing should be added subtracted or would have no eflect (NE) in arriving at accual basis net income. Acerued interest receivable on a note receivable is $600. Adided Subtracted NE 22 Which of the following is an example of an smesting activar? Purchasing suplies to be consumed this period. Purchasing new equipment to be used in the business. Iswuing shares of comman stock for canh. Selsine merchandise to cuntoeners on account. 23.200nin1 Before montheend adjustments aro made, the December 2023 tral bolance of Enthy I contans revenue of $13,000 and axpensos of $9.000 resuling in income belore adustments of 54,000 indicite whethor the follosing should be addod sutitracted of would havo no effect (NE) in ariving at accrual berss not income The pertion of the supplies inventory (a current asset) that was used during December is 5400 . Acted Subtracted