The Year-End Adjustment to Recognize One Month's Work on the Three-Month

question 28

Multiple Choice

The year-end adjustment to recognize one month's work on the three-month contract results in a $2,000 decrease in liabilities (unearned revenue) and an increase in equity (retained earnings due to recognizing revenue) .
The following account balances were drawn from the 2016 financial statements of Grayson Company:

-Jason Company paid $7,200 for one year's rent in advance beginning on October 1,2015.Jason's 2015 income statement would report rent expense,and its statement of cash flows would report cash outflow for rent,respectively,of

• A)$7,200;$7,200
• B)$1,800;$1,800
• C)$1,800;$7,200
• D)$1,200;$7,200

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Definitions:

Seismic Stations

Facilities equipped to detect, record, and measure seismic waves generated by earthquakes or other seismic events.

Hypocenter

The place where an earthquake is generated; synonym: the focus.

Strike-slip Fault

A type of fault where the movement of the Earth's crust is predominantly horizontal, parallel to the strike of the fault.

Reverse Fault

A reverse fault is a type of geological fault where the hanging wall moves upward relative to the footwall, typically occurring in areas of compression like the boundaries of convergent tectonic plates.