Which of the following is an example of an accrual error?

a$.$ failure to adjust Prepaid Insurance to its proper balance at

year end

b$.$ failure to adjust Inventory to its proper balance at year end

c$.$ failure to record depreciation at year end

d$.$ none of the above

Which of the following is an example of a deferral error?

a$.$ initially recording advance payment of an insurance premium to

Prepaid Insurance instead of Insurance Expense

b$.$ failure to record interest expense incurred but not yet paid

c$.$ failure to adjust Unearned Revenue to its proper balance at

year end

d$.$ none of the above

On April $1,20$X$0,$ your company finances partial payment of the sale of$..$

machinery to a customer for a $$20,000,3-$year, $8\%$ note receivable. Inter$-$

est is payable annually on April $1.$ On December $31,20$X$0,$ an adjusting

entry debits Interest Receivable and credits Interest Revenue for $$1,600.$

The entry necessary to correct the error before the books are closed would

include $...$

a$.$ a $$400$ debit to Interest Revenue

b$.$ a $$400$ credit to Interest Expense

c$.$ a $$400$ credit to Unearned Interest Receivable

d$.$ a $$400$ credit to Sales

Which of the following statements about accrual and deferral errors is

correct?

a$.$ Accrual errors affect only balance sheet accounts.

b$.$ Deferral errors affect only income statement accounts.

c$.$ Accrual and deferral errors affect both income statement and

balance sheet accounts.

d$.$ All above statements are correct.