Using the Balance Day Adjustment journals below as an example, identify and explain the potential impacts on the Income Statement and Balance Sheet if these two Balance Day Adjustment journals are not posted/ processed. You must conclude what overstatement or understatement would result in both the Income Statement and Balance Sheet. 30 June 2020 (dr) Rent Revenue $5,580 (cr) Unearned Rent Revenue $5,580(to record the unearned rent revenue) 30 June 2020 (dr) Insurance Expense $990 (cr) Prepaid Insurance $990 (to record the prepaid insurance expired for June )

If any Balance Day Adjustment journals are not posted/ processed, then it may lead to…

Answered: Using the Balance Day Adjustment…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10P: At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2...

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Using the Balance Day Adjustment journals below as an example, identify and explain the potential impacts on the Income Statement and Balance Sheet if these two Balance Day Adjustment journals are not posted/ processed. You must conclude what overstatement or understatement would result in both the Income Statement and Balance Sheet.

30 June 2020 (dr) Rent Revenue $5,580

(cr) Unearned Rent Revenue $5,580

(to record the unearned rent revenue)

30 June 2020 (dr) Insurance Expense $990

(cr) Prepaid Insurance $990

(to record the prepaid insurance expired for June )

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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