During the Course of the Year 2 Audit of Smithsone

question 56

Essay

During the course of the year 2 audit of Smithsone Company,the auditor discovered the following situations that may or may not require an adjusting journal entry.Each audit finding is independent of any of the other findings.Select the account or accounts that would comprise the adjusting journal entry,if required,to correct the audit finding.Accounts may be used once,more than once,or not at all. $$\begin{array}{l}\text { Selection list for amount }\\\begin{array} { l l l } \text { Cash } & \text { Accrued liabilities } & \text { Interest expense } \\\text { Accounts receivable } & \text { Common stock } & \text { Other income } \\\text { Other current assets } & \text { Revenues } & \text { Accumulated depreciation } \\\text { Property and } & \text { Allowance for doubtful } & \text { Disclosure but no entry } \\\text { equipment } & \text { accounts } & \text { required } \\\text { Accounts payable } & \text { Operating expenses } & \begin{array} { l } \text { No entry or disclosure } \\\text { required }\end{array}\end{array}\end{array}$$

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Definitions:

Social Perception

The process by which individuals form impressions and make inferences about other people and social situations based on observable cues and contextual information.

Pygmalion Effect

A psychological phenomenon in which higher expectations lead to an increase in performance.

Self-Fulfilling Prophecies

The psychological phenomenon where a belief or expectation, positive or negative, influences behavior in a way that makes the belief come true.

Integrative Approach

The broad theory that describes personality as a composite of an individual’s psychological processes.