Quality Heating Company Has the Following Liabilities at Year End

question 90

Essay

Quality Heating Company has the following liabilities at year end:
$\begin{array}{lr}\text { Notes Payable } & \$ 20,000 \\\text { Accounts Payable } & 15,000 \\\text { Unearned Contract Revenue } & 9,000 \\\text { Wages Payable } & 2,900 \\\text { Interest Payable } & 700\end{array}$
a. Which of these accounts probably was/were created at the end of the fiscal year as a result of an accrual? Which probably was/were adjusted at year end? Explain your answer.
b. Which adjustments probably reduced net income? Which probably increased net income? Explain your answers.

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Definitions:

Preoccupation

A state of mind consumed by persistent thoughts or concerns, often distracting from other aspects of life.

Food

Any nutritious substance that people or animals eat or drink or that plants absorb in order to maintain life and growth.

Semistarvation Diet

A diet that provides insufficient caloric intake to maintain normal body functions, often leading to severe physical and mental health consequences.

Anorexia Nervosa

Anorexia Nervosa is an eating disorder characterized by an intense fear of gaining weight and a distorted body image, leading to severe restriction of food intake.