The Downtown Company accumulates the following adjustment data at December 31. 1 Revenue of $1,100 collected in advance has been recognized. 2 Salaries of $600 are unpaid. 3. Prepaid rent totaling $400 has expired. 4. Supplies of $550 have been used. 5. Revenue recognized but unbilled totals $750. 6. Utility expenses of $300 are unpaid. " 7. Interest of $250 has accrued on a note payable. (a) Your answer is partially correct. For each of the above items indicate: The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense). 1. 2. The account relationship (asset/liability, liability/revenue, etc.). 3. The status of account balances before adjustment (understatement or overstatement). 4. The adjustment. Indicate the change in each account affected (Increase or Decrease), the account title of each account affected, and the amount. Type of Adjustment Account Relationship Unearned Revenue v 1. Liability Revenue Account Balances Before Adjustment (Understatement or Overstatement) Adjustment Liability Understatement Increase v Revenue Overstatement Increase Accrued Expense 2. Asset Liability Asset Understatement Increase Liability Overstatement Increase Prepaid Expense Asset Liability Asset Understatement Increase Liability Overstatement Increase Accrued Expense 4. Liability Revenue Liability Overstatement Increase Revenue Overstatement Increase Accrued Revenue Asset Liability Asset Understatement Increase Liability Understatement Increase Accrued Expense Asset 6. Liability v Asset Understatement Increase Liability Overstatement Increase 7. Accrued Expense Asset Liability Asset Understatement Increase Liability Overstatement Increase it Adjustment Income Effect Increase (Decrease) atement Increase itement Increase ment Increase tement Increase ament Increase tement Increase tement Increase stement Increase ment Increase atement Increase ment Increase tement Increase Increase ement tement Increase