Regarding the Effects of End-Of-Period Adjustments,state Whether Each of the Following

question 33

Short Answer

Regarding the effects of end-of-period adjustments,state whether each of the following statements is true or false.
_____ a)Recording the usage of supplies involves an increase in liabilities and a decrease in equity.
_____ b)The accrual of salaries is considered a claims exchange transaction.
_____ c)Recording services performed on a prepaid contract involves a decrease in liabilities and an increase in assets.
_____ d)End-of-period adjustments often affect cash flows.
_____ e)Failure to record accrued salaries at the end of the year will cause reported net income to be higher than it should have been.

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Definitions:

Sales Return

Goods returned by the customer to the seller after the sale, leading to a reversal of revenue recorded.

Collection

Collection involves the process of gathering or receiving payments, funds, or necessary documents, especially in the context of business receivables or debts.

Perpetual Inventory System

Inventory accounting method where transactions are instantly recorded via computerized point-of-sale systems and enterprise asset management software.

Merchandise

Goods bought and sold by businesses in the course of their trade; often refers specifically to products sold by retail businesses.