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TRUE FALSE. Write Tithe statement is true and the statement is fine. 1) Adjusting entries are designed primarily to correct erroes made by bookkeepers ) 2) 2) Before making adjusting entries at the end of an accounting period, some account may not show proper financial statement amounts even though all transactions were correctly recorded 3) If equipment were purchased from an outside party, the sing up of the equipment's economic benefit would be considered an extemal transaction 4) The 12 consecutive months (or 52 weeks) selected as an organization's accounting period is called the fiscal year 5) Since the revenue recognition principle requires that revenues be cared, there is no such thing as uncanned revenues in accounting 6) The economic effect of an expense is incurred when the benefit expires or is used up not when cash is paid 7) The cash basis of accounting commonly results in financial statements that are not comparable from period to period 8) The accrual basis of accounting is an accounting system in which revenues are reported as camned when cash is received 9 9) Gallery Corp. paid $6,000 for a six-month insurance policy for the company van. The policy coverage began on January 1. On January 31, $1,000 of insurance expense must be reported 10) 10) On October 15, Gallery Corp, received $12.500 as a down payment on a consulting contract. The amount was credited to Uncamned Consulting Revenue. By October 31. 10% of the contract was completed. Gallery Corp. needs to prepare an adjusting entry for $1.250 11) Adjusting entries are posted to the general ledger. 12) Before an adjusting entry for accrued salaries is made the amount in Salaries Expense is understated and the amount in Salaries Payable is also understated 13) If on January 1 of this year, a company paid $12,000 rent for one year and adjusting cntries are made at the end of each month, the balance of Prepaid Rent at December 1 of this year should be $1.000 D ) 14) During August, Gallery Corp purchased $4,000 worth of supplies. At August 31 the adjusted balance in the Supplies account was $2,800. The adjusting entry included a $1.200 debit to Supplies Expense. 15) The adjusted trial balance must be prepared before the adjusting entries are made

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