***Please check my answers. Answers are bolded.***

25.) Taylor's bookkeeper records three items:

$5,000 of unearned revenue being earned

$1,000 cash collected from earnings recorded in the prior period

$3,000 cash collected in advance of services

What is the change in liabilities for the current period?

a. $8,000

b. $5,000

c. $2,000

d. $1,000

e. $3,000

26.) Failure to record the adjustment to recognize the used portion of prepaid expenses:

a. Understates Liabilities

b. Understates Revenue

c. Overstates Expenses

d. Understates Assets

e. Overstates Assets

27) The following items appeared on the January 31 bank reconciliations for Gower Company:

Bank Service Charge: $8

NSF Check: $40

Outstanding Checks: $30

Deposit in Transit: $80

Error: Deposit by Gower for $404 was correctly recorded by Gower, but recorded for $440 by the bank.

Bank collection of Note Receivable for Gower: $170

The unadjusted balance per the January 31 books is $1,000.

The adjusted cash balance for the January 31 balance sheet is:

Select one:

a. $952

b. $1,014

c. $1,136

d. $1,122

e. $1,086