The Unadjusted Trial Balance and the Adjustment Data for Porter

question 231

Essay

The unadjusted trial balance and the adjustment data for Porter Business Institute are given below along with adjusting entry information.What is the impact on net income if these adjustments are not recorded? Show the calculation for net income without the adjustments and net income with the adjustments.Which one gives the most accurate net income? Which accounting principles are being violated if the adjustments are not made?
Additional information items:
a.The Prepaid Insurance account consists of a payment for a 1 year policy.An analysis of the insurance invoice indicates that one half of the policy has expired by the end of the December 31 year-end.
b.A cash payment for space sublet for 8 months was received on July 1 and was credited to Unearned Rent.
c.Accrued interest expense on the note payable of $1,000 has been incurred but not paid.

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Definitions:

Life Span

The maximum period that an individual organism can live; in humans, it often refers to the average duration of life.

Identity Cohesion

The sense of clarity, confidence, and consistency in one's identity and sense of self over time and across situations.

Role Confusion

A situational or developmental issue where an individual struggles to understand their own role or identity within specific contexts or society.

Epigenetic Principle

A concept in psychological development that proposes growth occurs through a predetermined unfolding of personalities, in which early experiences can affect later outcomes, but not through direct genetic transmission.