The accountant at AppsGeronimo, a technology business, has determined that the following adjustment should be made in the entity s account for the year ended 30 September using an accrual-based system.

An annual premium of $ 3,000 paid to the Insurance Company on 1 January.

Income earned but not invoiced totaling $ 18,000

Cash received for applications not yet developed of $ 6,000

Equipment depreciation expense of $ 5,000

Unpaid wages and salaries of $ 2,000

Required: For each item, analyse:

The nature of the adjustment that needs to be made! (20 points)

Whether the profit for the reporting period would have been under or overstated without the

adjustment occurring! (5 points)