Indicate with a Yes or No whether or not each of the following accounts normally requires an adjusting entry: a. Building b. Cash c. Wages Expense d. Miscellaneous Expense e. Nancy Palmer, Capital f. Prepaid Insurance

Question

Annabelle Valencia

Business

10 March, 00:33

Indicate with a Yes or No whether or not each of the following accounts normally requires an adjusting entry: a. Building b. Cash c. Wages Expense d. Miscellaneous Expense e. Nancy Palmer, Capital f. Prepaid Insurance

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Answers (1)

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Alissa Carey · Answer 1

A) No.

B) No.

C) Yes.

D) No.

E) No.

F) Yes.

Explanation:

A) Since, building is an asset which doesn't require any adjusting entry other than depreciation.

B) Asset as well therefore, no adjusting entry required.

C) It requires adjusting entry when the salaries are payable (You haven't paid yet, but you have to pay).

D) These are the small transactions of business which doesn't require an adjusting entry.

E) Capital stock increases with the increase of shares and vice versa so it doesn't require Adjusting entry as well.

F) It requires adjusting entry because you have paid for the service before availing it.