QUESTION 1 Your company purchased $2,000 of supplies and recorded the amount as an asset. At year end, a physical count shows $700 of supplies on Before closing the books, it is discovered that an adjusting entry was never made. If no correcting entry is made, O the income statement will be accurate, but the balance sheet will be understated O assets will be understated and net income will be understated O the balance sheet will be accurate, but the income statement will be understated O assets will be understated and net income will be overstated O assets will be overstated and net income will be overstated O assets will be overstated and net income will be understated QUESTION 2 On March 31, 20X8, your calendar year company takes out a 3-year insurance policy with a premium of $4,000 per year. The entire $12,000 is advance and is recorded as prepaid insurance. At year-end 20xS, you discover that the adjusting entry debits Insurance Expense for $4,000 a Prepaid insurance for $4,000. if you do not correct this Click Save and Submit to save and submit. Click Save All Answers to save all answers O Type here to search