The Unadjusted Trial Balance and the Adjustment Data for Harris

question 12

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The unadjusted trial balance and the adjustment data for Harris Training Institute are given below along with adjusting entry information. If these adjustments are not recorded, what is the impact on net income? Show calculation for net income without the adjustments and net income with the adjustments. Which one gives the most accurate net income? What 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.

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Definitions:

Continuum Perspective

The view that mental health and mental illness exist on a spectrum, suggesting that individuals vary in degree of mental health or illness rather than being categorically healthy or ill.

Diagnosing Personality Disorders

The process of identifying and classifying patterns of behavior and thought that deviate significantly from societal expectations and cause dysfunction or distress.

Independent Perspective

An outlook or viewpoint that is free from the influence or control of others, often leading to unique or unconventional ideas.

Personality Trait

Enduring patterns of thoughts, feelings, and behaviors that differentiate individuals from one another.