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:

Present Value

The contemporary value of money or cash flows due in the future, calculated with a designated rate of return.

Received

To have been given, accepted, or acknowledged something that is sent or provided.

Economic Rent

The excess payment made to a factor of production over and above what is needed to keep it in its current use.

Land

In economics, it refers to all natural resources used to produce goods and services, one of the factors of production.