The Unadjusted Trial Balance and the Adjustment Data for Porter

question 144

Essay

The unadjusted trial balance and the adjustment data for Porter Business Institute, Inc. are given below along with adjusting entry information. What is the impact on net income if these adjustments are not recorded? Show the calculation for net income without the adjustments and net income with the adjustments. Which one gives the most accurate net income? Which accounting principles are being violated if the adjustments are not made? Additional information items:
a. The Prepaid Insurance account consists of a payment for a 1 year policy. An analysis of the insurance invoice indicates that one half of the policy has expired by the end of the December 31 year-end.
b. A cash payment for space sublet for 8 months was received on July 1 and was credited to Unearned Rent.
c. Accrued interest expense on the note payable of $1,000 has been incurred but not paid.

---

Definitions:

Prestige

The respect and admiration that an individual, occupation, or organization receives based on perceived success, achievements, or rank within a society.

Healthier Lives

A term referring to the improved physical, mental, and social well-being of individuals or populations, often as a result of public health interventions and lifestyle choices.

HIV/AIDS

A chronic, potentially life-threatening condition caused by the human immunodeficiency virus (HIV) which interferes with the body's ability to fight infections.

Adult Population

Refers to the segment of a society that comprises individuals considered legally adults, often used in statistical analyses focusing on demographic characteristics.