Part III-CLO: 3, Total 10 Marks 0. No.3 1. What is meant by the term unearned revenue? Where should an unearned revenue account appear in the financial statements? As the work is done, what happens to the balance of an unearned revenue account? 2. On December 1, Wendy Corporation purchased a six-month insurance policy from The Lyons Agency for $3,000. Prepare the necessary adjusting entry for The Lyons Agency on December 30. And identify type of adjusting entry? 3. What is effect of adjusting entry Type 2 on Assets, Liabilities, Owner's Equity, Revenue, and Expense & Net Income by using code I for increasing, D for Decreasing and NE for no effect? Part IV-CLO: 3, Total 10 Marks Q. No. 4 At December 31, 2009, ABC company's inventory amounted to Rs. 44000/-. Jan 3, sold goods to ZEF Company for Rs. 20000/- cash. The cost of the same was Rs. 11200/- Jan 7, purchased goods at the cost of Rs. 10000; terms 2/10, 1/30. ABC Company, records purchases at net cost. Instructions: a) Prepare Journal entries, if ABC Company uses a perpetual inventory system. b) Compute the balance in the inventory control account at January 7. c) Prepare Journal entries, if ABC company uses a periodic inventory system d) Compute the cost of Goods sold for first week of January, assuming use of the periodic system. As the amount of ending inventory, use your answer to part b