Patterson Company Was Founded in 2013 and Engaged in the Following

question 17

Essay

Patterson Company was founded in 2013 and engaged in the following transactions:
1. issued common stock for cash
2. purchased supplies on account
3. collected cash from a customer for services to be provided over a period of 1 year
4. paid a cash dividend to stockholders
5. purchased a 2-year fire insurance policy
6. provided services to customers on account
7. collected cash from accounts receivable
8. paid cash for various operating expenses
9. paid rent in advance for 3 months at a time
Required:
a) Which of the above transactions would require adjusting entries at year end?
b) Why are adjusting entries required before financial statements can be prepared.

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Definitions:

Exclusive Right

A legal provision or contract granting a party sole authority to use, sell, or license a particular product, service, or intellectual property.

Cable Television

A system for delivering television programming to paying subscribers via radio frequency signals transmitted through coaxial cables or digital light pulses through fiber-optic cables.

Households

Entities consisting of one or more people who live in the same dwelling and share meals or living accommodation; they may also pool their incomes.

Societal Loss

Societal Loss pertains to the broader negative impacts or costs borne by society, which can stem from various actions or policies, such as environmental degradation or public health issues.